DCF and Risk-Neutral Valuation: A comparison - Image 1

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VDM Verlag DCF and Risk-Neutral Valuation: A comparison

Name: DCF and Risk-Neutral Valuation: A comparison
Brand: VDM Verlag
Price: 47.0 GBP
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The book illustrates an alternative corporate valuation method to the well known DCF. The limitations and drawbacks of the discounting model and especially of the CAPM question its validity for such an important practice for management as corporate valuation. Being based on the option pricing theory and on the concepts of replication and no arbitrage, risk-neutral valuation uses a completely different approach to account for the risk of a cash flow. In fact, the model applies risk-neutral probabilities to adjust the risky future cash flows of the firm to certainty equivalence. The available literature is reviewed and the two valuation approaches are tested by estimating the value for a sample of five companies and comparing the results to the market capitalisation. By analysing the companies ABB, Bâloise, Novartis, UBS and Valora, the empirical test covers different sectors, sizes and degrees of financial stability.

Product Specifications

Brand: VDM Verlag
Format: paperback
ASIN: 3639318994
Category: Books > Subjects
Domain: Amazon UK
Release Date: 09 January 2011
Listed Since: 11 January 2011

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VDM Verlag DCF and Risk-Neutral Valuation: A comparison

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