Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )
Akeyinputtothisapproachistheestimateofthecumulative probability of distress over the valuation period. In this section,weconside ...
heprovidedevidencetobackuphisclaim.Sincehisstudy, both academicsandpractitionershavedeveloped theirown versions of these credit ...
Oneadvantageofthisapproachisthatitcanbeextendedto coverthelikelihoodofdistressatfirms withoutsignificant debt.Forinstance,wecoul ...
Cumulative Probability of Distress Rating5 Years 10 Years AAA 0.03% 0.03% AA 0.18 0.25 A+ 0.19 0.40 A 0.20 0.56 A– 1.35 2.42 BBB ...
We can illustrate the use of this approach with Global Crossing. At the end of 2001, Global Crossing had been assignedabondratin ...
convertibility will render the approach unusable—but the bondpricehastobeavailable.Ifthecorporatebondissueis privately placed, t ...
Estimating Distress Sale Proceeds Oncewehaveestimatedtheprobabilitythatthefirmwillbe unabletomakeitsdebtpaymentsandwillceasetoex ...
valueofassets,basedontheexperienceofotherdistressed firms. Thus, the factthat other distressed companies were abletoselltheirass ...
Since the firmhad debtoutstanding with a face value of $7,647million,theequityinvestorswouldreceivenothingin theeventofadistress ...
two years to maintenance levels. The following table summarizes ourassumptions onrevenue growth,EBITDA/ sales, and reinvestment ...
Theaccumulatedlossesoverthefirst nineyears shieldthe firmfrompayingtaxesuntilthetenthyear.Afterthatpoint, we assumed a marginal ...
19 Basedonitsmarketcapitalization(forequity)of$1,649 millionatthetimeofthisvaluation,weestimatedamarket debt-to-capital ratio fo ...
To estimatethe reinvestmentrate in theterminalyear, we assumedthatGlobalCrossingwouldearnitscostofcapitalof 7.36% in perpetuity ...
Value of the operating assets of the firm$5,529.92 million + Cash and marketable securities $2,260.00 million Market value of d ...
Market value of equity $ 300.15 million –Value of options outstanding $ 14.31 million Value of equity in common stock$ 285.84 mi ...
fromthevalueoftheoperatingassetsisthatmoreattention can be paid to the cost and probability of distress. ReviewingthestepsintheA ...
Thethirdstepistoevaluatetheeffectofthegivenlevelof debt on the default risk of the firm and on expected bankruptcy costs. This r ...
21 Theypresenttwowaysofadjustingdistresscostvalueto reflect this systematic risk. In the first, they derive probabilitiesofdefau ...
The unlevered firm value is $10,346 million. To this we shouldaddtheexpectedtaxbenefitsofdebt.Sincethefirmis losing money and ha ...
Therewere 886.47millionsharesoutstandinginDecember 2001. RELATIVE VALUATION Most valuations in practice, including those of dist ...
«
54
55
56
57
58
59
60
61
62
63
»
Free download pdf