Discounting in agro-industrial complex. A methodological proposal for risk premium

Marques-Perez, Inmaculada; Guaita-Pradas, Inmaculada; Perez-Salas, Jose-Luis

doi:10.5424/sjar/2017151-10225

Cited by 10 publications

(9 citation statements)

References 17 publications

(24 reference statements)

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“…The scientists such as Marques-Perez I. [1], Stasytyt e, Viktorija and Dužinskyt ˙ e Viktorija [2], Santeramo [3] also confirm the fact that agrarian sphere differs from others and there is a high risk and income instability. But in spite of many risk factors it is a sphere of high profitability and it is always interesting for investors.…”

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confidence: 82%

“…In particular, Marques-Perez I. et al [1] proved that the definition of the discount rate is one of the most important issues in the assessment of this type of business. They proposed a new methodology of the discount rate calculation when assessing the value of the agro-industrial complex in their article.…”

Section: ________________________________________________________________________________________________________________________________mentioning

confidence: 99%

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Valuing Agricultural Enterprise for Investment Purposes: Methodological Aspect

Sivitska¹

2019

Modecon

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Introduction. The production cycle of agricultural enterprises and agribusiness management differs significantly from other sectors. Scientists emphasize significant differences of agrarian sphere from other ones, strong dependence on unpredictable weather changes inherent in it. Also, there is an increased risk of income instability, volatility of agricultural markets and variety of activities that can be conducted in one enterprise. Along with the presence of many risk factors, this area is also characterized by high profitability and it is always attractive to investors. Consequently, there is a need to improve the methodology of agricultural business valuation and the search for the most correct method and methodological approach to determine the value of agricultural business for investment purposes.Purpose. The purpose of the study is to determine which of the methods of business valuation is the most suitable for objective agricultural business valuation for investment purposes.Conclusions. The novelty of the article is it proves that a Build-up approach is appropriate for discount rate calculation (in agricultural business valuation for investment purposes). And justification of the fact that Cost of equity capital model (cash flow discounting-based method of business valuation) is acceptable for agrarian business valuation was further developed. As this model provides the most objective information for investors and business owners and is most often used by professionals for valuing a business when investment decisions are necessary. The results show that Income approach, Cash flow discounting method (Cash flow type -Equity cash flow) is the correct methodology for valuing agricultural business for investment purposes.

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Section: ________________________________________________________________________________________________________________________________mentioning

confidence: 82%

Section: ________________________________________________________________________________________________________________________________mentioning

confidence: 99%

Valuing Agricultural Enterprise for Investment Purposes: Methodological Aspect

Sivitska¹

2019

Modecon

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“…O interesse pelo complexo industrial como campo de estudo tem emergido e crescido substancialmente em todas as partes do mundo. Em países localizados nos continentes europeus e asiáticos como Rússia (KORMISHKINA et al, 2014;FROLOV e LAVRENTYEVA, 2015;VOROTNIKOV et al, 2015;KADOMTSEVA, 2016;PROKHOROVA et al, 2016;DORZHIEVA, 2017;PANFILOV, 2017;BOGOVIZ et al, 2018;GONCHAROV, 2018;ANFINOGENTOVA et al, 2018;RODIONOVA, 2018;ZAKIROVA, 2018;KALYKOVA et al, 2018;VORONKOVA et al, 2020;ZAYTSEV, 2020), Sérvia (ADZIC, 2008;SAVIĆ et al, 2016) (TEMIRBEKOVA et al, 2014;KALDIYAROV et al, 2017;MADIYEV et al, 2018;KAIYRBAYEVA et al, 2018;KALDIYAROV et al, 2019), República de Bascortostão (KRIONI et al, 2017); Grécia (DANTSIS et al, 2009), Montenegro (RAGULINA, 2019), Letônia (BILOVOL e CHAIKINA, 2016), Mianmar (WOODS, 2013), Indonésia (MCCARTHY e ZEN, 2009), Malásia (PHANG, 1990;JAYAKUMAR et al, 2017), Tailândia (KANJANATARAKUL e SURIYA, 2012), Vietnã (ANH et al, 2011), Filipinas (MONTEFRIO e DRESSLER, 2018), Romênia (CUCUI et al, 2018), Espanha (GÓMEZ et al, 2010;MARQUES-PEREZ et al, 2017;EGEA et al, 2018), República de Altai (GLOTKO et al, 2018), Itália (SCHIEVANO et al, 2009DUDIN et al, 2016;VERGINE et al, 2017), regiões do mar Negro e mar Cáspio…”

Section: Complexos Agroindustriaisunclassified

Complexos Agroindustriais: Análise Da Literatura Indexada Na Base De Dados Web of Science – 1945 a 2020 / Agroindustrial Complexes: Analysis of Literature Indexed in the Web of Science Database – 1945 to 2020

Oliveira

De-Carli

2021

BJD

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O estudo objetivou analisar quantitativamente as publicações científicas em complexos agroindustriais a partir da literatura indexada na base de dados da Web of Science. De natureza exploratória-descritiva, empregou-se a técnica bibliométrica para análise da produção científica sobre a temática proposta. Utilizando-se os descritores "agroindustrial complex" ou "agroindustrial complex", foram recuperados em fevereiro de 2021, 171 artigos. Os resultados apontaram Economics e Business Economics como categoria e área de pesquisa predominantes, respectivamente. O aumento no número de publicações mostrou-se ascendente ao longo do período com destaque para o ano de 2018. O inglês foi o idioma em que mais se publicou (57,9%), seguido do russo (28,07%). Quanto aos países de origem das publicações, destacaram-se Rússia, Ucrânia, Checoslováquia, Bielorrússia e Cazaquistão; destes, exceto Ucrânia e Checoslováquia, são membros da União Econômica Euroasiática (UEE). Das vinte instituições de pesquisa com maior volume de publicações em complexos agroindustriais, 60% estão situadas em território russo. Por fim, constatou-se um ordenamento com elevada dispersão das publicações, de modo que 21 pesquisadores concentram 44 publicações (5,80%) ao passo que 94,20% dos pesquisadores (341) possuem uma publicação cada.

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“…(4) Marques-Perez et al (2017) stated that the discount rate in agro-industrial firms is an essential tool for appropriate corporate management.…”

Section: (3)mentioning

confidence: 99%

Valuation of agrifood SMEs. Lessons to be learnt from the stock market

Vidal¹,

Ribal

2018

Span. j. agric. res.

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The European agrifood industry is mostly characterized by small and medium enterprises (SMEs); as in 2013, SMEs represented 99.13% of the total number of companies. The valuation of SMEs not listed in any stock market is a complex task since there is not enough information on comparable transactions. When applying discounted cash flow (DCF) models to value private agrifood companies, the capital structure and the cost of equity are two key parameters to be determined. The implications of these parameters in the value of the enterprise are not clear inasmuch as it is not possible to carry out a contrast due, precisely, to the lack of comparables. The main goal of this study is to determine the biases that those two parameters can introduce into the valuation process of an agrifood company. We have used the stock market as a framework wherein to apply a simple fundamental model to the companies of the European food industry in order to obtain three valuation multiples. By means of two bootstrap approaches, the bias induced in the multiples has been assessed for every year from [2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013]. Results show that the use of the return on equity as cost of equity tends to undervaluation; the use of capital asset pricing model (CAPM) tends to a slight overvaluation, whereas using the total beta induces an undervaluation bias. Moreover, the capital structure shows little influence on the valuation multiples. The conclusions drawn from this paper can be useful for managers and shareholders of privately-held agrifood companies.

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Discounting in agro-industrial complex. A methodological proposal for risk premium

Cited by 10 publications

References 17 publications

Valuing Agricultural Enterprise for Investment Purposes: Methodological Aspect

Valuing Agricultural Enterprise for Investment Purposes: Methodological Aspect

Complexos Agroindustriais: Análise Da Literatura Indexada Na Base De Dados Web of Science – 1945 a 2020 / Agroindustrial Complexes: Analysis of Literature Indexed in the Web of Science Database – 1945 to 2020

Valuation of agrifood SMEs. Lessons to be learnt from the stock market

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