IDEAS home Printed from https://ideas.repec.org/p/pil/wpaper/48.html
   My bibliography  Save this paper

Valuing distressed privately held companies in Brazil that export to Europe and the US: The case of a furniture manufacturing company

Author

Listed:
  • Ronald Jean Degen

    (International School of Management Paris)

Abstract

This paper explains the valuing of distressed privately held companies in Brazil based on the acquisition process of a furniture manufacturing company that exports 90 percent of its furniture to Europe and the US. The three valuation approaches--discounted cash-flow valuation, relative valuation and contingent claims valuation--are described, as are the shortcomings of each approach in the valuation of distressed privately held companies. The discounted cash-flow approach is detailed for the valuation of a distressed privately held company in Brazil that exports to Europe and the US.

Suggested Citation

  • Ronald Jean Degen, 2009. "Valuing distressed privately held companies in Brazil that export to Europe and the US: The case of a furniture manufacturing company," Working Papers 48, globADVANTAGE, Polytechnic Institute of Leiria.
    • Handle: RePEc:pil:wpaper:48
    as

    Download full text from publisher

    File URL: https://globadvantage.ipleiria.pt/files/2009/10/working_paper-48_globadvantage.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. DePamphilis, Donald & DePamphilis, Donald, 2009. "Mergers, Acquisitions, and Other Restructuring Activities," Elsevier Monographs, Elsevier, edition 5, number 9780123748782.
    2. Merton, Robert C, 1974. "On the Pricing of Corporate Debt: The Risk Structure of Interest Rates," Journal of Finance, American Finance Association, vol. 29(2), pages 449-470, May.
    3. Degen, Ronald, 2009. "China?s challenges to future sustainable economic growth and the implications for the United States," Working Papers 45, globADVANTAGE, Polytechnic Institute of Leiria.
    4. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gordian Rättich & Kim Clark & Evi Hartmann, 2011. "Performance measurement and antecedents of early internationalizing firms: A systematic assessment," Working Papers 0031, College of Business, University of Texas at San Antonio.
    2. Jeremy Leake, 2003. "Credit spreads on sterling corporate bonds and the term structure of UK interest rates," Bank of England working papers 202, Bank of England.
    3. Boulanouar, Zakaria & Alqahtani, Faisal & Hamdi, Besma, 2021. "Bank ownership, institutional quality and financial stability: evidence from the GCC region," Pacific-Basin Finance Journal, Elsevier, vol. 66(C).
    4. Richardson, Grant & Taylor, Grantley & Lanis, Roman, 2015. "The impact of financial distress on corporate tax avoidance spanning the global financial crisis: Evidence from Australia," Economic Modelling, Elsevier, vol. 44(C), pages 44-53.
    5. Zhijian (James) Huang & Yuchen Luo, 2016. "Revisiting Structural Modeling of Credit Risk—Evidence from the Credit Default Swap (CDS) Market," JRFM, MDPI, vol. 9(2), pages 1-20, May.
    6. Sandrine Lardic & Claire Gauthier, 2003. "Un modèle multifactoriel des spreads de crédit : estimation sur panels complets et incomplets," Économie et Prévision, Programme National Persée, vol. 159(3), pages 53-69.
    7. Polito, Vito & Wickens, Michael, 2015. "Sovereign credit ratings in the European Union: A model-based fiscal analysis," European Economic Review, Elsevier, vol. 78(C), pages 220-247.
    8. Hilscher, Jens & Raviv, Alon, 2014. "Bank stability and market discipline: The effect of contingent capital on risk taking and default probability," Journal of Corporate Finance, Elsevier, vol. 29(C), pages 542-560.
    9. Andres, Christian & Cumming, Douglas & Karabiber, Timur & Schweizer, Denis, 2014. "Do markets anticipate capital structure decisions? — Feedback effects in equity liquidity," Journal of Corporate Finance, Elsevier, vol. 27(C), pages 133-156.
    10. Anna Kovner & Chenyang Wei, 2012. "The private premium in public bonds," Staff Reports 553, Federal Reserve Bank of New York.
    11. António Afonso & Jorge Braga Ferreira, 2024. "Bank’s Risk-Taking Channel of Monetary Policy and TLTRO: Evidence from the Eurozone," CESifo Working Paper Series 11116, CESifo.
    12. Wang, Peiwen & Chen, Minghua & Wu, Ji & Yan, Yuanyun, 2023. "Do peer effects matter in bank risk? Some cross-country evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 88(C).
    13. Bjork, Tomas, 2009. "Arbitrage Theory in Continuous Time," OUP Catalogue, Oxford University Press, edition 3, number 9780199574742.
    14. Wen Su, 2021. "Default Distances Based on the CEV-KMV Model," Papers 2107.10226, arXiv.org, revised May 2022.
    15. Klomp, Jeroen, 2013. "Government interventions and default risk: Does one size fit all?," Journal of Financial Stability, Elsevier, vol. 9(4), pages 641-653.
    16. Muhammad Suhail Rizwan & Asifa Obaid & Dawood Ashraf, 2017. "The Impact of Corporate Social Responsibility on Default Risk: Empirical evidence from US Firms," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(3), pages 36-70, September.
    17. Jobst, Andreas A., 2014. "Measuring systemic risk-adjusted liquidity (SRL)—A model approach," Journal of Banking & Finance, Elsevier, vol. 45(C), pages 270-287.
    18. Battulga Gankhuu, 2022. "Merton's Default Risk Model for Private Company," Papers 2208.01974, arXiv.org.
    19. Chava, Sudheer & Jarrow, Robert, 2008. "Modeling loan commitments," Finance Research Letters, Elsevier, vol. 5(1), pages 11-20, March.
    20. Augusto Castillo, 2004. "Firm and Corporate Bond Valuation: A Simulation Dynamic Programming Approach," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 41(124), pages 345-360.

    More about this item

    Keywords

    valuing distressed companies; valuing privately held companies; valuing companies in Brazil that export to Europe and the US; determining the average cost of capital; determining the weighted cost of capital for companies in Brazil that export to Europe and the US;
    All these keywords.

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pil:wpaper:48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nuno Reis (email available below). General contact details of provider: https://edirc.repec.org/data/deiplpt.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.