Risk, Value and Default

Scholars and practitioners have known for a long time that risk plays an important, indeed central, role in determining the appropriate discount rate to be used in a sophisticated valuation model. In today's world, however, the very risk of survival, especially for financial institutions, is essential to the health of the world's capital markets and their impact on the global economy.

Risk, Value and Default is a vital text for understanding the interaction between enterprise risk management with corporate valuation and corporate default. The book seeks to explore the interaction between the risk of default and enterprise risk, and their joint impact on firm valuation. It aims to address the problem of how corporations should deal with risk and how they can maximize shareholder value. It also examines various conceptual ways to measure risk, thereby bridging the gap between theoretical concepts and pragmatic application.

The book combines sound conceptual analytics and empirical tools to provide useful information and tangible guidelines for firms, risk managers and financial analysts and advisors. Scholars and professionals with an interest in risk management, and managers, owners, creditors and potential investors in enterprises will find Risk, Value and Default a particularly useful guide to understanding the relationship between risk generation, risk management and corporate value and default from an interdisciplinary perspective.

Contents:

• The Concept of Risk and the Enterprise Risk Management:

  • The Corporate Risk
  • Risk Management: Analysis of Risk, Endowment Capital, and Suppliers of Finance

• Estimating Default Risk in Practice: Methodologies and Discriminant Variables:

  • Credit Risk, Default, and Borrowing Costs
  • Company Default and Discriminant Variables for SME
  • Default Risk and Discriminant Methodologies for SME

Readership: Scholars and practitioners with an interest in risk governance, valuation and risk management within the context of the risk management and governance, corporate finance, banking, econometrics, mathematical economics and quantitative finance.
Key Features:

• Explores the interaction between the risk of default and enterprise risk, and their joint impact on firm valuation
• Addresses the problem of how corporations should deal with risk and how they can maximize shareholder value
• Combines sound conceptual analytics and regional firm data to provide useful information and tangible guidelines for firms as well as for analysts