Contribution of lifelong learning to company’s value growth

In the context of knowledge based economy and human capital, the paper treats of the relation between lifelong learning and the generation of value for the stockholders. The advantages provided by the financial resources have been exhausted in recent years, so learning and knowledge accumulation have become a major source of economic growth and a key factor ensuring the competitiveness of a company nowadays

Fine Tuned Income Approach in Real Estate Valuation in Emerging Europe: The Case of Bulgaria

The Chamber of Independent Appraisers in Bulgaria adopted the International Valuations Standards of IVSC. The income approach is one of the three approaches for valuation adopted by International Valuation Standards Council (IVS, 2011). It prescribes three methods of the approach: (1) capitalization; (2) discounted cash flows (DCF), and (3) various option valuation models. The DCF application in real estate valuation is illustrated in TIP 1 Discounted Cash Flows of IVS. One of the key input variables in the DCF method is the discount rate. IVS in paragraph 21 in TP 1 presents the capital asset pricing model as a method for estimation of the cost of equity. The CAPM could be adjusted for country risk and other specific firm risks. The focus of our study is on the main considerations behind the appropriate determination of the discount rate when performing real estate valuations throughout the Income Approach. We propose a model, which is a modification of the Salomon Smith Barney model for cost of capital determination. The model reflects the following characteristics: (1) the degree of diversification of the particular investor (imperfectly diversified); (2) country risk; (3) firm specific risks; and (4) time varying risk nature. The first assumption of the model is that the Bulgarian financial market is partially integrated into the Global market. Our second assumption is that the purchase parity holds in the long run. The lack of size effect is the third assumption. The inputs of the model have as a source only publicly available data. The systematic country risk indicator is the Index of Economic Freedom of the Heritage Foundation. The Global equity risk premium is obtained from the Credit Suisse Global Investment Returns Yearbook. The equity risk premium is adjusted with the ratio between the unconditional long run standard deviation of the company and the unconditional long run standard deviation of the global portfolio. The unconditional long run standard deviation is a square root of the unconditional long run variance, which is derived from the AR(1)-GARCH (1,1) model with non-normal distributed residuals. The econometric model incorporates the non-synchronous effect and time varying risk. An illustration of the proposed model is the case of U.S. investor who considers an investment in a couple of Bulgarian REITs

Intellectual Capital and value Creation – Evidence from Companies Listed at BSE

In this paper we apply measurements of intellectual capital focusing on the human capital efficiency (HCE), the structural capital efficiency (SCE), the intellectual capital efficiency (ICE) and the value added intellectual coefficient (VAIC TM ) developed by Pulic (2000; 2004) for non-financial companies listed at Bulgarian Stock Exchange (BSE) using accounting data published with their financial statements for the period 2003-2009. The research is focused on companies in the manufacturing industry in order to derive any particularities in the measurements. The financial industry is excluded from the study as being specific. At this moment and to our knowledge, there’s no significant research on the value added of intellectual capital of Bulgarian non – financial industry. We extended the formula of intellectual capital valuation and arrived at the conclusion that intellectual capital is playing an important role in the value creation process in some companies listed at BSE

The objective uncertainty of the market values of real estate (in the example of a developed and an emerging market)

This report is devoted to uncertainty of market valuations and its impact to the reports prepared by practicing real estate appraisers in the United States and Bulgaria. The essential thing here is that in the USA are applicable the U.S. appraisal standards (Uniform Standards of Professional Appraisal Practice - USPAP), and in Bulgaria, from the beginning of 2014, the International Valuation Standards – IVS. On this basis, the investigation focuses on the different concepts of the real estate value and the methods of its determination; potential advantages and issues in the light of the application of different standards; understanding the valuation uncertainty as a possibility for an asset estimated value to differ from the price that would be received from the sale of this asset in the same conditions, time and market environment in which the valuation was made. The purpose of the selected subject and approach in this report is to increase consistency and transparency of practices and methods for the valuation of real estates globally