Continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms

This paper proposes a fuzzy binomial valuation model to estimate leveraged firm value while conditioning its continuity or liquidation in cash flow generation after taxes to attend debt payments. It includes two triangular fuzzy variables. Thus, we incorporate ambiguity in the firm valuation process...

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Autores principales: Milanesi, Gastón S., Pesce, Gabriela, El Alabi, Emilio
Lenguaje:Inglés
Publicado: Macrothink Institute. 2018
Materias:
Firm valuation
Fuzzy sets
Binomial model
Uncertainty
Adjust present value
Debt effects
Acceso en línea:http://repositoriodigital.uns.edu.ar/handle/123456789/4262
Aporte de:
Repositorio Institucional Universidad Nacional del Sur (UNS) de Universidad Nacional del Sur
id I20-R126123456789-4262
record_format dspace
institution Universidad Nacional del Sur
institution_str I-20
repository_str R-126
collection Repositorio Institucional Universidad Nacional del Sur (UNS)
language Inglés
orig_language_str_mv eng
topic Firm valuation
Fuzzy sets
Binomial model
Uncertainty
Adjust present value
Debt effects
spellingShingle Firm valuation
Fuzzy sets
Binomial model
Uncertainty
Adjust present value
Debt effects
Milanesi, Gastón S.
Pesce, Gabriela
El Alabi, Emilio
Continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms
topic_facet Firm valuation
Fuzzy sets
Binomial model
Uncertainty
Adjust present value
Debt effects
description This paper proposes a fuzzy binomial valuation model to estimate leveraged firm value while conditioning its continuity or liquidation in cash flow generation after taxes to attend debt payments. It includes two triangular fuzzy variables. Thus, we incorporate ambiguity in the firm valuation process characterized by uncertainty in projections of both growth and financial costs. Our proposed model is presented, developed, and exemplified through a case results complement both the DCF (under the adjusted present value) and the traditional real option binomial method. This occurs because, in one hand, DCF method assumes decisions’ irreversibility and operating firms’ situation. On the other hand, traditional binomial model weakens previous restrictions but does not incorporate ambiguous variables in the analysis. Hence, fuzzy logic applied to option models allows us to complement probabilistic valuation approach working on a frame of possibilities.
author Milanesi, Gastón S.
Pesce, Gabriela
El Alabi, Emilio
author_facet Milanesi, Gastón S.
Pesce, Gabriela
El Alabi, Emilio
author_sort Milanesi, Gastón S.
title Continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms
title_short Continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms
title_full Continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms
title_fullStr Continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms
title_full_unstemmed Continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms
title_sort continuity or liquidation in situations of ambiguity : fuzzy binomial model to valuate leveraged firms
publisher Macrothink Institute.
publishDate 2018
url http://repositoriodigital.uns.edu.ar/handle/123456789/4262
work_keys_str_mv AT milanesigastons continuityorliquidationinsituationsofambiguityfuzzybinomialmodeltovaluateleveragedfirms
AT pescegabriela continuityorliquidationinsituationsofambiguityfuzzybinomialmodeltovaluateleveragedfirms
AT elalabiemilio continuityorliquidationinsituationsofambiguityfuzzybinomialmodeltovaluateleveragedfirms
bdutipo_str Repositorios
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