Which methods can I apply? Which variables can I choose as enterprise risk management?
Standard deviation of return or cash flow can be used as a measure of business/enterprise risk
Hello,
I send some documention. I hope it helps your work.
Best regards
Jorge Gomes
Hi,
I think that empirical results provide evidence that hedging affects firm value by alleviating the costs of financial distress and the underinvestment problem. You can have look at the following papers:
Allayannis, G., Weston, J., 2001. The use of foreign currency derivatives and firm market value. Review of Financial Studies 14, 243-276
Campello, M., Lin, C., Ma, Y., Zou, H., 2011. The real and financial implications of corporate hedging. Journal of Finance 66, 1615-1647..
Pérez-González, F., Yun, H., 2013. Risk management and firm value: evidence from weather derivatives. Journal of Finance 68, 2143- 2176.
Also, you could find interesting the following book, which is the publication of the author's PhD work. Although it focuses on banks, the theoretical part is well articulated.
Schroeck, Gerhard (2002). Risk management and value creation in financial institutions. John Wiley & sons. Hoboken. New Yersey (USA)
The value of the firm is affected by risk. Usually risk is taking into account by the discount rate. Thus, you have to look at this variable. In this sense, the minimum rate of return is a key factor.
I suggest to read the paper:
Rojo Ramírez, A. A. 2014. Privately held company valuation and cost of capital. Journal of Business Valuation and Economic Loss Analysis, 9(1): 1–22.
- Badges
- Science topic
- Similar topics
- Books