Corporate valuation with mixed financing strategies and cross-border relations

Die Bewertung von Unternehmen ist ein theoretisch anspruchsvolles, aber praktisch sehr relevantes Thema. Die Bewertung wird in der Regel mit Hilfe von Discounted Cashflow (DCF) Methoden durchgeführt. Ein wichtiger Teil der Unternehmensbewertung mit DCF-Methoden sind Annahmen über zukünftige Fremdkapitalbestände und die Anpassung von Kapitalkostensätzen an das entsprechende Finanzierungsrisiko. In der Praxis der Unternehmensbewertung wird grundsätzlich davon ausgegangen, dass eine wertabhängige oder autonome Finanzierung in allen zukünftigen Perioden angewendet wird. Theoretische und empirische Studien zeigen jedoch, dass eine rein wertabhängige oder rein autonome Finanzierungspolitik das Finanzierungsverhalten von Unternehmen oft nicht präzise widerspiegelt. Aus diesem Grund wurden in der theoretischen Literatur zur Unternehmensbewertung verschiedene Ansätze entwickelt, die eine wertabhängige und autonome Finanzierung kombinieren, um sich dem tatsächlichen Finanzierungsverhalten von Unternehmen anzunähern. Dies führte zu gemischten Finanzierungsstrategien. Diese Dissertation befasst sich daher in einem ersten Schritt mit den Problemen der Implementierung des realen Finanzierungsverhaltens von Unternehmen, durch die Analyse von gemischten Finanzierungsstrategien. Ziel ist es, die bestehende Theorie zu erweitern, indem empirische und theoretische Erkenntnisse berücksichtigt werden, gleichzeitig aber die Theorie einfach genug zu halten, um für die Praxis noch relevant zu sein. Insbesondere werden die Eigenschaften von hybrider und diskontinuierlicher Finanzierung in einem Zwei-Phasen-Modell untersucht und verglichen, wobei die diskontinuierliche Finanzierung eine verzögerte Anpassung von Fremdkapitalbeständen berücksichtigt. Außerdem wird die Restwertberechnung genauer analysiert und die Besonderheiten der Annahme einer diskontinuierlichen Finanzierung in einem eingeschwungenen Zustand werden aufgezeigt. Zur Lösung der sich daraus ergebenden Probleme werden Fremdkapitalkategorien als eine neue gemischte Finanzierungsstrategie entwickelt. Aufgrund der fortschreitenden Globalisierung werden Theoretiker und Praktiker mit zusätzlichen Problemen konfrontiert, die bei der Bewertung von internationalen Investitionen und internationalen Unternehmen auftreten. Beispielsweise müssen die Auswirkungen unterschiedlicher Währungen, internationaler Besteuerung und gesetzlicher Vorgaben berücksichtigt werden. Wenn Größen in eine andere Währung umgerechnet werden, ist es unklar, ob Termin- oder Kassawechselkurse verwendet werden sollten. Beide Ansätze werden in der Literatur beschrieben, aber eine gemeinsame Analyse und einen Vergleich gibt es bisher nicht. Zudem ist die konsistente Anpassung von Kapitalkostensätzen an das Wechselkursrisiko unklar. Darüber hinaus werden Fremdfinanzierung und die Implementierung eines Zwei-Phasen-Modells oft nicht berücksichtigt. Deswegen untersucht diese Dissertation in einem zweiten Schritt die grundlegenden Probleme der internationalen DCF-Bewertung, mit dem Ziel, einen konsistenten Bewertungsrahmen zu schaffen, in den Fremdfinanzierung integriert werden kann. Insgesamt leistet diese Dissertation einen Beitrag zur Literatur der Unternehmensbewertung, indem die Forschung über gemischte Finanzierungsstrategien erweitert und sortiert wird, und Antworten auf Probleme der internationalen Bewertung aufgezeigt werden.Corporate valuation is a theoretically challenging but practically highly relevant field. It is usually conducted using discounted cash flow (DCF) methods. One important part of corporate valuation with DCF methods are assumptions about future debt levels and the adjustment of costs of capital to the corresponding financial risk. In corporate valuation practice, it is usually assumed that active or passive debt management is pursued in all future periods. However, theoretical and empirical findings show that pure active or pure passive debt management are usually not accurate reflections of the financing behavior of firms. Consequently, corporate valuation theory started combining active and passive debt management to approach the real financing behavior of firms, resulting in mixed financing strategies. Thus, in a first step, this thesis addresses problems of implementing the real financing behavior of firms by analyzing mixed financing strategies. The aim is to extend existing theory to account for empirical and theoretical findings but at the same time keep the theory simple enough to be practically relevant. In particular, the characteristics of hybrid and discontinuous financing in a two-phase model are investigated and compared, where discontinuous financing considers a lagged adjustment of debt levels. Furthermore, terminal value calculation is analyzed more closely and the shortcomings of the assumption of discontinuous financing in a steady-state phase are addressed. By presenting a solution to resulting problems, debt categories as a new mixed financing strategy are developed. Furthermore, due to the ongoing globalization, theorists and practitioners face additional problems that arise in a valuation of cross-border investments and international companies. For example, effects of different currencies, international taxation and legal regulations have to be considered. If quantities are converted to another currency, it is ambiguous whether forward or spot exchange rates should be used. Both approaches are described in the literature but a joint analysis and a comparison does not exist so far. Moreover, a consistent adjustment of costs of capital to exchange rate risk is not clear. In addition, debt financing and the implementation of a two-phase model are mostly not considered. Thus, in a second step, the more fundamental problems of cross-border DCF valuation are examined with the objective to derive a consistent valuation framework in which debt financing can be integrated. Overall, this thesis contributes to the literature on corporate valuation by expanding and sorting the research on mixed financing strategies, and by providing answers to problems of international valuation2023-09-0

VAIC: Nueva métrica de evaluación de desempeño gerencial y herramienta de evaluación de inversiones

Artículo de reflexiónEste artículo introduce una nueva métrica financiera para la evaluación del desempeño gerencial, el Valor Añadido de la Inversión de Capital (VAIC), con el costo de capital no apalancado como una tasa de corte para el cálculo de los requerimientos de capital en lugar del CPPC (WACC) ampliamente aceptado. VAIC conserva todas las características positivas de la utilidad operativa residual convencional y VEA (EVA®) y tiene la ventaja de la sencillez en su cálculo y una interpretación directa y clara. El modelo de valoración asociado es equivalente al método de flujo de caja descontado estándar; esta equivalencia se demuestra formalmente bajo ciertas hipótesis sobre el riesgo de los escudos fiscales (ahorros en impuestos) y confirma la consistencia de la nueva medida propuesta. VAIC puede servir como un indicador económico global en los cuadros de mando de desempeño empresarial, y bien podría ser considerado como un sustituto válido para el VEA (EVA©) ya establecido y ROI en la evaluación de desempeño de la gerencia. La equivalencia del modelo de valoración VAIC con el enfoque fundamental de la valoración de una empresa con flujos de caja descontados hace que este indicador no sea sólo una medida de solidez financiera, sino también una herramienta de valoración de inversiones en el más completo sentido

The total assessment profile, volume 2

Appendices are presented which include discussions of interest formulas, factors in regionalization, parametric modeling of discounted benefit-sacrifice streams, engineering economic calculations, and product innovation. For Volume 1, see

Protected Area Assessment and Establishment in Vanuatu

Resource /Energy Economics and Policy,

Strengths and Weaknesses of the Excess Earnings Method for Valuing Backlog

For make-to-order manufacturing firms, a valuable intangibles asset is represented by the backlog, namely a company's sales orders waiting to be filled. Not infrequently, the value of this asset can constitute a significant part of the value of the company. Valuation experts may be called on to value the order backlog in case of the sale of both one or more contracts and of firms or business units. A strongly accredited method both in doctrine and in practice for valuing customer-related assets, such as backlog, is the Excess Earnings Method (EEM). However, theoretical contributions on the use of the EEM in the specific estimate of backlog are quite rare. This paper examines the topic of backlog valuation performed using EEM. After describing the valuation process, a critical analysis of the EEM when applied to such valuation object is carried out, with the aim of grasping its strengths and weaknesses. We conclude that backlog valuation performed using EEM while on the one hand is characterized by strong economic rationality and enjoys general acceptance in the context of professional business valuation services, on the other it highlights significant elements of uncertainty due to the multiple estimates needed. Moreover, it is an extremely complex and time-consuming process, whose application requires a high level of specialist knowledge and skills on the part of the valuation expert. Keywords: backlog, valuation of backlog, excess earnings method, customer-related assets. DOI: 10.7176/RJFA/11-22-12 Publication date: December 31st 202

Structural changes in economics during the last fifty years

This essay portrays the major currents in recent economic thinking against the orthodoxy and dogmatism of neoclassical economics. It places behavioral economics, experimental economics, evolutionary economics, ecological economics, new institutional economics, agent-based computational economics and post-autistic economics vis-à-vis the classical and the neoclassical economics. It concludes that we may expect a synthesis of all these strands of economic thinking in the near future that will replace neoclassical economics from the citadel of mainstream. Teaching of these strands of new economics has already begun in many universities, although in an un-integrated manner. However, until the neoclassical microeconomics and macroeconomics are replaced by their alternatives and necessary as well as convincing tools of economic analysis are developed, neoclassicism would not give way to modern economics.Behavioral; experimental; evolutionary; ecological; new institutional; agent-based computational; post-autistic; classical; neoclassical, economics; bounded rationality; heterodox; individualism; pluralism

Facades-as-a-Service: A cross-disciplinary model for the (re)development of circular building envelopes

Facades-as-a-Service (FaaS) is a systemic innovation model aiming to accelerate and enhance the energy and comfort performance improvement of our buildings, while safeguarding the availability of material resources for future generations. The circular economy and clean energy transitions in the built environment have respectively dominated the academic dialogue in architecture, engineering, and real estate over the last decades. While significant progress has been made, and many fine examples of more sustainable architecture exist, the process has been hindered by traditional systemic models for the planning, contracting, financing, construction, and management of building projects. If we are to meet the ambitious climate-change mitigation goals and material resource preservation challenges of our generation, it is crucial to re-think the way in which we build, operate, and decommission the built environment. Product-service systems (PSS) are a promising model for realigning environmental risks and responsibilities with financial and business objectives, while promoting much deeper and long-lasting collaboration between all parties involved in a building’s life-cycle. This thesis focuses on the building envelope, as one of the most performance-determining systems in our buildings. It then questions the technological, managerial, financial, and legal contexts which often perpetuate unsustainable linear practices despite the urgency for - and technical feasibility of - more energy- and resource-efficient alternatives. Facades-as-a-Service is a topic that extends far beyond technological readiness and architectural engineering. It is rather a thesis about how we make façade construction and retrofitting decisions, the systemic parameters that determine and constraint these decisions, and whether – in the search for a more sustainable built environment – we should question the fundamental concepts behind these decisions. The results show that gradual and strategic development with a multi-disciplinary perspective can enable and facilitate the implementation of more efficient and sustainable building practices

Equity valuation research : Corticeira Amorim SGPS S.A.

The main objective of Equity Valuation is to measure the value of a company based on its current assets and market position. The use of Equity Valuations help investors to make most informed investment decisions taking into account the true value of a company at any given time and its expected performance in the future. Notwithstanding, a good valuation must be based on consistent and solid assumptions in order to provide the most reliable illustration of the company business reality. In this sense, a proper equity valuation analysis needs to address all the critical endogenous and exogenous factors that influence the company business. The chosen valuation approach will also determine the accuracy of the final results. This dissertation focus on the Equity Valuation of Corticeira Amorim SGPS SA, the world’s biggest cork-transforming company and one of the most international Portuguese companies. In a period of unfavorable economic context, Corticeira Amorim has been able to buck the negative trend of most Portuguese companies based on its sustainable growth. Thereby, the company seems to be an interesting investment target to investors considering the recent and future optimistic perspectives of its business. Hereupon, the objective of this dissertation is to provide an investment recommendation based on the estimated market value of Corticeira Amorim. Throughout this dissertation, all the determinant topics that support the valuation results are discussed, namely: different valuation approaches, industry and company overviews and forecast assumptions. The final topic focus on the comparison between BPI bank and this dissertation analyzes, discussing the differences on both valuations