MODERN METHODS AND MODELS VALUATION BANKING BUSINESS IN THE MACROECONOMIC ENVIRONMENT
Journal Title: Міжнародний науковий журнал "Інтернаука". Серія: "Економічні науки" - Year 2018, Vol 1, Issue 4
Abstract
The article presents some models of valuation of companies. The above formula for estimated cash receipts using the discount rate, which are given to their present value. The cost of the Bank's equity is proposed to be calculated using a cumulative approach that begins with the definition of a risk-free rate and which is supplemented by a risk bonus for the ofshare capital, a risk bonus inherent for the company, country risk bonus, and bonuses. As an adequate risk-free rate, it is proposed to use the profitability on a long-term US Treasury bonds at the valuation date. An analytical approach to the calculation of free cash flow for the bank and the calculation of the weighted average cost of capital is presented, and the DCF method calculates the cash flow for equity, and the discount rate is determined by the model of estimating the cost of equity. It is shown that in order to calculate the value of the evaluated object at the end of the forecast period to the distributed funds, the capitalization method is most often applied, and then the value of the evaluated object at the end of the forecast period is discounted to its present value taking into account the expected time of realization of benefits, and taking into account the corresponding risks. It is emphasized that when assessing the value of a share capital, cash flows generally include all cash receipts and bank expenses as an operating and capital nature, and show the amount of funds that the investor can withdraw from the business while retaining sufficient funds for financing operational activities and future bank’s growth. The formulas for calculating the market value of a real estate in a comparative approach, the method of analyzing trends in market prices, the method of capitalization of net operating income are presented. The peculiarities of the application of the cost approach to the evaluation of other non-negotiable material assets of the Bank are considered, which is determined using the method of indexing the initial value. It is presented that an effective age method is used to determine the amount of asset’s depreciation, that includes the amount of impairment, both due to deterioration of the initial technical characteristics and due to its functional aging. The presented methodology of the comparative approach, which is based on the assumption that the value of the bank's assets is determined by the price for which they can be sold in the presence of a sufficiently formed market. The features of the comparative approach are analyzed and cost-calculating formulas are demonstrated on condition that it is used, considering the methods of comparative analysis of paired sales and statistical analysis of market prices.
Authors and Affiliations
Dmytro Grydzhuk
Keywords
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- EP ID EP581198
- DOI 10.25313/2520-2294-2018-4-3460
- Views 120
- Downloads 0
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