haku: @indexterm VALUATION / yhteensä: 677
viite: 366 / 677
| Tekijä: | Arzac, E. |
| Otsikko: | Valuation of highly leveraged firms |
| Lehti: | Financial Analysts' Journal
1996 : JUL-AUG, VOL. 52:4, p. 42-50 |
| Asiasana: | FINANCE VALUATION COMPANIES |
| Kieli: | eng |
| Tiivistelmä: | The financial policy highly leveraged firms (HLFs) commonly follow implies uncertain leverage. Explicit allowance for this characteristic leads to two complementary pricing models. A recursive formula for the value of HLF follows from applying the adjusted present value (APV) approach to uncertain tax shields. This formula is used to evaluate the robustness of the simple APV rule and other valuation approaches used in practice. The HLF equity is also modeled as a call option with uncertain exercise price, which provides a natural way of dealing with uncertain leverage and complements the APV approach. |
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