Private Company Valuation

The recent crisis in financial markets has seen a gradual erosion of the boundaries of asset classes previously regarded as risk-free. We have gone from a world mostly free of default risk to one where credit risk is largely reflected in equity prices. Traditional valuation methods now need to be integrated to take into account a scenario in which expectations of growth are considerably reduced, and credit risk is increased to levels previously unheard of. But as the majority of private companies are sub-investment grade, Valuing Private Companies: How Credit Risk Reshaped Equity Markets and Corporate Finance Valuation Tools sets out an innovative new method for estimating private companies' cost of equity based on a Fixed Income Approach (FIA). In addition to the book's theoretical insights, illustrating in great detail the relationship between default risk and equity risk premium, readers will benefit from the practical experience the author has accumulated as a risk manager within major banking groups such as UniCredit Group, Capitalia SpA, and Banca di Roma SpA.