An article represents a comprehensive overview of approaches to capital structure modeling on the example of the public corporation Silvinit. At first, there are provided a short review of the company and of the corresponding industry followed by the description of how the analogues for the company were chosen. The next part of the article gives a step-by-step description of the practical implementation of such models as WACC model, EBIT-EPS, method of operational profit. Monte-Carlo approach is used for demonstrating an influence of the leverage increase on tax and interest payments as well as company's default risk. In conclusion the authors compare the results of different approaches with the current capital structure of Silvinit.
Emerging market companies typically have lover values than their counterparts in developed markets. In order to account for this practitioners typically use an ad hoc premium in discount rate in their DCF models – so called country risk premium. Approaches for this premium calculation do not have adequate theoretical basis in the literature. There is an alternative to premium which is in accounting for a country risk through scenario approach. However it is difficult to implement practically because of the calibration problem. Thus there is a problem of a country risk.
The concept of country risk premium has to be abandoned. We propose following procedure in emerging company DCF valuation.
1) Calculate theoretical discounted value as if the business is from developed country.
2) Account for the risk of an emerging market applying the discount. The discount can be obtained through analysis of differences between emerging and developed stock market multiples. As a result the problem of an emerging country risk stops being "black box" and becomes clear, observable and verifiable.
This paper proposes critical analysis of the theory and practice of discount rates. In addition paper gives a theoretical basis for country risk from the prospective of New Institutional Economics.
Factoring is an alternative to developing of inventory credit in view of some serious advantages: no need for a supplier to invest a lot of recourses into accounts receivable, to consider organizational issues to use sales credit etc. Development of factoring services takes leading positions among most developing financial sectors. For the last decade number of factoring companies has increased in 3.4 times, and their aggregate turnover - in 3.6 times. The article considers the issues of development of forms, methods and spheres of factoring application as one of the most important instruments of modern financial management. Utilization of factoring is topical for the Russian economy as well, for it improves liquidity of domestic enterprises by means of decreasing of accounts receivable as well as liquidation of non-payments.
The Lintner's model is one of classical model for analysis of didivend policy. In the paper the model was estimated for 4 the most growing country: Brazil, Russia, India, China. The results were compared with the estimation of Lintner's model for the USA. One of main results of work that dividends policy in emerging country has similar tendencies (high the speed of adjustment coefficient,low target payout ratio), but differ from its in developed market the USA.
The main aim of the research is to analyze the existing sustainability accounting and reporting practices, to set up recommendations for improving the sustainability reporting legislation (as a result of author’s participation in the international research project, University of Western Ontario, Canada). Corporate social responsibility has become part and parcel of Russian business. Consequently, the demand to the quality of non-financial accounting and reporting has increased. Detailed analysis of Russian and international experience, assessment of current trends contributes to an improvement of the non-financial accounting and reporting system.
The article includes literature review of research in non-financial reporting problematic. Particular attention is paid to current research trends. The paper contains of the acquired analysis and classification of recent themes in non-financial reporting and accounting research.
Based on this analysis, we conclude that the general attention should be paid to the improvement of legislation in the field of non-financial reporting regarding the information related to the indexes disclosed in the non-financial reports, capital data, including intellectual capital in term of companies’ sustainable development. The compulsory regulation of non-financial reporting and accounting is required for state companies, joint-stock companies, companies with large sales and assets.
According to research, the most advanced form of non-financial reporting is integrated reporting. Conceptual approach to integrated reporting is based on integrated thinking. A systematic approach in the disclosure of non-financial information creates additional opportunities to analyze and improve the various aspects of the economic, environmental and social development for the Russian companies. For this purpose, the development of the detailed legislation background in integrated reporting is required.
Companies from emerging markets, such as China, India, Malaysia, Russia and South Africa, use mergers and acquisitions (M&A) as one of the main instruments to grow and enter global markets. After the global financial crisis in 2008, companies from emerging markets initiated over 25% of M&A deals volume between developed and emerging markets companies.
M&A decisions are vital for long-term development of emerging market companies. Recent empirical research shows that companies from developed and emerging markets have different motives and seek different types of synergy in M&A deals.
Companies from United States and Europe usually look for economies of scale. On developed, low-growth markets one reliable way to higher profits is to reduce costs with economies of scale. Companies from emerging markets look for market competences that they are lacking: technologies, brands, business models or skilled employees. Therefore, there is a need to identify determinants of synergy creation in M&A deals initiated by emerging markets companies.
This article aims to systematize existing literature about synergy and validate theoretical model suitable for synergy valuation and regression analysis of M&A deal in Russia. We review academic research on M&A synergy, identify major factors of synergy creation and methods of synergy valuation in emerging markets, analyze differences in major factors of synergy creation for developed and emerging markets.
Attraction of investments is one of the key problems which have to be solved to continue development of Russian electric utilities sector. High uncertainty of tariff price caps regulation and volatility of prices of energy sources have a negative impact on investment climate in this sector. However real option analysis (ROA) allows to implement management flexibility under constantly changing environment and look at risks of investment in utilities from another point of view.
This paper provides a review of literature on ROA applications to valuation of investment projects and management decisions. Particularly an approach to valuation of GENCO is considered, implementing real options (spark spread options) on electricity price with strike which depends on price of energy sources. Major attention of researches attracted also to options to switch from one energy source to another including renewable sources. Energy efficiency plays an important role in development of electric utilities sector. That is why methods of valuations of investments in energy efficiency are considered.
Key words: real options analysis, spark spread options, irreversible investments, energy efficiency, electric utilities
The purpose of this work focuses on the determination the formation of the optimal value premium in M & A transactions, in terms of the oil and gas sector, through the identification of financial and non-financial factors that have a direct impact on the premium rate.
The article discusses the evolution and the state of the art of IR (Investor Relations) in Western and Russian companies. IR is considered as a particular area of corporate communicational practice and a field of academic research. Author reviews the history and stages of IR as corporate activity, IR functions and models of company’s interaction with an investment community. The main objective of the article is to compare the features of a professional institutionalization and the current state of IR in Russia and in other countries.
The empirical part of the research is based on the information from the Internet sites of the first hundred of the largest (in terms of sales) Russian companies entering the RAEX-600 rating.
The main findings of the article are: (1) the Russian professional IR-community is in the start yet, though its institutional basis is already created: there are the professional association and the magazine, as well as a number of special courses in some educational programs of Moscow universities; (2) the amount of academic researches (journal papers and dissertations) from 2003 to 2015 is quite moderate; the dynamics of research interest is influenced by the financial crisis of 2008-2009; (3) the practice of providing information to investors on the sites of Russian companies is not unified; noticeable distinctions are revealed in structure and volume of IR-sites’ content; (4) as a whole, the substance of information intended to investors of the largest Russian companies on their websites is generally consistent to Western practice of IR.
This paper presents the results of the study related to investigation of relational capital influence on a company’s value. Relational capital is regarded not just as the company’s relationship framework but also as an issue closed to social capital which implies extracting implicit knowledge, ideas, innovations and decisions. This allows us to analyze an impact that this kind of capital has on the company’s value indirectly that is through knowledge creation, accumulation and exchange process. The results show that relational capital could be considered as the enhancer of the knowledge creation, its extraction and implementation hidden in the company’s external relations. Moreover, it could be able becoming a driver of the company’s value growth even without the company’s orientation on knowledge management.
The aim of the study is to investigate the influence of cross-listing (depositary receipts issue) on the market value of russian companies. The article contains recent dynamics description, literature review, and description of event-study algorithm. We analyze 34 Russian companies, which issued depositary receipts during the period 1996 - 2012. The result is that cumulated average abnormal return is positive on the event window [-10; 10] days. Thus, market evaluates the event positively, market value of companies increases after the cross-listing abroad.
The paper presents the results of the study of mergers and acquisitions’ impact at the fundamental value of acquiring companies at BRICS countries. The research is based on the Residual Income Valuation (RIV) model. At the sample of 366 M&A deals, related to the period of 2009 – 2012, it was revealed that mergers and acquisitions resulted in the growth of fundamental value per share of acquiring companies. Also the factors, causing the value creation or decrease, were undermined, among which there was the company’s size, the mode of deal funding, the industrial specifics and the method of payment.