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| Author: | Homburg, C. Stephan, J. Weiss, M. |
| Title: | Unternehmensbewertung bei atmender Finanzierung und Insolvenzrisiko |
| Journal: | Betriebswirtschaft
2004 : MAY/JUN, VOL. 64:3, p. 276-295 |
| Index terms: | Finance Liquidation Risk Company value Models |
| Language: | ger |
| Abstract: | Based on the Adjusted Present Value (APV)-method, this paper considers the problem of firm valuation with an underlying insolvency risk (hereafter as: ins. r.) and value-related financing. The paper analyzes the effects of an ins. r. on the tax shield, the cost of capital, and the resulting corporate value. Furthermore, a relation btw. the cost of equity of the unleveraged and the leveraged company is established by applying the weighted average cost of capital including ins. r. Disregarding the ins. r. leads to a considerable bias in the value of the firm. It is shown how this bias can be avoided by applying modified Discounted Cash Flow (DCF)-approaches (original in German). |
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