Credit Risk, Cost of Capital and Excessive Financial Leverage
Conventionally, business valuation methods do not usually incorporate explicitly the effects that the probable bankruptcy costs of the firm could have on the cost of capital. Doing this introduces a stress test in the estimation of the discount rate, which can be very relevant for the fair valuation...
- Autores:
-
Gutiérrez Betancur, Juan Carlos
Mejía Kambourova, David
Gómez Cardeño, Laura
- Tipo de recurso:
- Fecha de publicación:
- 2020
- Institución:
- Universidad EAFIT
- Repositorio:
- Repositorio EAFIT
- Idioma:
- spa
- OAI Identifier:
- oai:repository.eafit.edu.co:10784/17633
- Acceso en línea:
- http://hdl.handle.net/10784/17633
- Palabra clave:
- Debt
Cost of debt
Cost of equity
WACC
Tax shield
Deuda
Costo de la deuda
Riesgo de crédito
Costo del patrimonio
WACC
Beneficio fiscal
- Rights
- License
- Copyright © 2020 Juan Carlos Gutiérrez Betancur, David Mejía Kambourova, Laura Gómez Cardeño
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Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees2020-02-282020-09-04T16:41:25Z2020-02-282020-09-04T16:41:25Z1657-4206http://hdl.handle.net/10784/17633Conventionally, business valuation methods do not usually incorporate explicitly the effects that the probable bankruptcy costs of the firm could have on the cost of capital. Doing this introduces a stress test in the estimation of the discount rate, which can be very relevant for the fair valuation of excessively leveraged companies traded on the stock market. In this sense, the purpose of this article is to demonstrate the resulting financial vulnerability for this type of firms by explicitly adjusting the cost of capital for bankruptcy risk, and highlighting its implications for the stock market and bank debt market, based on a comparative analysis between three alternative methods of calculating the weighted average cost of capital.Convencionalmente, los métodos de valoración de empresas no suelen incorporar explícitamente los efectos que podrían tener los probables costos de quiebra de la firma sobre el costo del capital. Hacer esto introduce una prueba de estrés en la estimación de la tasa de descuento, que puede ser muy relevante para la valoración justa de empresas excesivamente apalancadas transadas en bolsa. En este sentido, el propósito de este artículo consiste en evidenciar la vulnerabilidad financiera resultante para este tipo de firmas al ajustar explícitamente por riesgo de quiebra el costo del capital, y resaltar sus implicaciones para el mercado de deuda bursátil y bancaria, partiendo de un análisis comparativo entre tres métodos alternativos de cálculo del costo promedio de capital: costo promedio ponderado del capital clásico sin riesgo de incumplimiento, costo promedio ponderado del capital con costo de la deuda esperado ajustado internamente por riesgo de incumplimiento y costo promedio ponderado del capital con costo de la deuda ajustado externamente por riesgo de incumplimiento.application/pdfspaUniversidad EAFIThttps://publicaciones.eafit.edu.co/index.php/ecos-economia/article/view/6345https://publicaciones.eafit.edu.co/index.php/ecos-economia/article/view/6345Copyright © 2020 Juan Carlos Gutiérrez Betancur, David Mejía Kambourova, Laura Gómez CardeñoAcceso abiertohttp://purl.org/coar/access_right/c_abf2Ecos de Economía, Vol. 23, Núm. 49 (2019)Credit Risk, Cost of Capital and Excessive Financial LeverageRiesgo de Crédito, Costo del Capital y Apalancamiento Financiero Excesivoarticleinfo:eu-repo/semantics/articlepublishedVersioninfo:eu-repo/semantics/publishedVersionArtículohttp://purl.org/coar/version/c_970fb48d4fbd8a85http://purl.org/coar/resource_type/c_6501http://purl.org/coar/resource_type/c_2df8fbb1DebtCost of debtCost of equityWACCTax shieldDeudaCosto de la deudaRiesgo de créditoCosto del patrimonioWACCBeneficio fiscalGutiérrez Betancur, Juan CarlosMejía Kambourova, DavidGómez Cardeño, LauraUniversidad EAFITEcos de economía23494570THUMBNAILminaitura-ecos_Mesa de trabajo 1.jpgminaitura-ecos_Mesa de trabajo 1.jpgimage/jpeg251248https://repository.eafit.edu.co/bitstreams/f82ae674-b6c1-4dcd-8489-779f13c228ae/download9b15d674b076c1793a0bc25cebb1bcefMD51ORIGINALdocument - 2020-09-12T172538.276.pdfdocument - 2020-09-12T172538.276.pdfTexto completo PDFapplication/pdf659872https://repository.eafit.edu.co/bitstreams/3fd9dc2e-95d6-498c-9823-1182345905d1/downloadc3eda3d6dba1b9f5e5da4e78c8ca5595MD52articulo - copia.htmlarticulo - copia.htmlTexto completo HTMLtext/html378https://repository.eafit.edu.co/bitstreams/fd388a5b-5e4b-4e0d-a7cf-5751966a4413/download28e3a2451e8788bc89458f79ffe1ac11MD5310784/17633oai:repository.eafit.edu.co:10784/176332020-09-12 17:27:50.112open.accesshttps://repository.eafit.edu.coRepositorio Institucional Universidad EAFITrepositorio@eafit.edu.co |
| dc.title.eng.fl_str_mv |
Credit Risk, Cost of Capital and Excessive Financial Leverage |
| dc.title.spa.fl_str_mv |
Riesgo de Crédito, Costo del Capital y Apalancamiento Financiero Excesivo |
| title |
Credit Risk, Cost of Capital and Excessive Financial Leverage |
| spellingShingle |
Credit Risk, Cost of Capital and Excessive Financial Leverage Debt Cost of debt Cost of equity WACC Tax shield Deuda Costo de la deuda Riesgo de crédito Costo del patrimonio WACC Beneficio fiscal |
| title_short |
Credit Risk, Cost of Capital and Excessive Financial Leverage |
| title_full |
Credit Risk, Cost of Capital and Excessive Financial Leverage |
| title_fullStr |
Credit Risk, Cost of Capital and Excessive Financial Leverage |
| title_full_unstemmed |
Credit Risk, Cost of Capital and Excessive Financial Leverage |
| title_sort |
Credit Risk, Cost of Capital and Excessive Financial Leverage |
| dc.creator.fl_str_mv |
Gutiérrez Betancur, Juan Carlos Mejía Kambourova, David Gómez Cardeño, Laura |
| dc.contributor.author.spa.fl_str_mv |
Gutiérrez Betancur, Juan Carlos Mejía Kambourova, David Gómez Cardeño, Laura |
| dc.contributor.affiliation.spa.fl_str_mv |
Universidad EAFIT |
| dc.subject.keyword.eng.fl_str_mv |
Debt Cost of debt Cost of equity WACC Tax shield |
| topic |
Debt Cost of debt Cost of equity WACC Tax shield Deuda Costo de la deuda Riesgo de crédito Costo del patrimonio WACC Beneficio fiscal |
| dc.subject.keyword.spa.fl_str_mv |
Deuda Costo de la deuda Riesgo de crédito Costo del patrimonio WACC Beneficio fiscal |
| description |
Conventionally, business valuation methods do not usually incorporate explicitly the effects that the probable bankruptcy costs of the firm could have on the cost of capital. Doing this introduces a stress test in the estimation of the discount rate, which can be very relevant for the fair valuation of excessively leveraged companies traded on the stock market. In this sense, the purpose of this article is to demonstrate the resulting financial vulnerability for this type of firms by explicitly adjusting the cost of capital for bankruptcy risk, and highlighting its implications for the stock market and bank debt market, based on a comparative analysis between three alternative methods of calculating the weighted average cost of capital. |
| publishDate |
2020 |
| dc.date.available.none.fl_str_mv |
2020-09-04T16:41:25Z |
| dc.date.issued.none.fl_str_mv |
2020-02-28 |
| dc.date.accessioned.none.fl_str_mv |
2020-09-04T16:41:25Z |
| dc.date.none.fl_str_mv |
2020-02-28 |
| dc.type.eng.fl_str_mv |
article info:eu-repo/semantics/article publishedVersion info:eu-repo/semantics/publishedVersion |
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http://purl.org/coar/version/c_970fb48d4fbd8a85 |
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http://purl.org/coar/resource_type/c_6501 http://purl.org/coar/resource_type/c_2df8fbb1 |
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Artículo |
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publishedVersion |
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1657-4206 |
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http://hdl.handle.net/10784/17633 |
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1657-4206 |
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http://hdl.handle.net/10784/17633 |
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spa |
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spa |
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https://publicaciones.eafit.edu.co/index.php/ecos-economia/article/view/6345 |
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https://publicaciones.eafit.edu.co/index.php/ecos-economia/article/view/6345 |
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Copyright © 2020 Juan Carlos Gutiérrez Betancur, David Mejía Kambourova, Laura Gómez Cardeño |
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http://purl.org/coar/access_right/c_abf2 |
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Acceso abierto |
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Copyright © 2020 Juan Carlos Gutiérrez Betancur, David Mejía Kambourova, Laura Gómez Cardeño Acceso abierto http://purl.org/coar/access_right/c_abf2 |
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application/pdf |
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Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees |
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Universidad EAFIT |
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Ecos de Economía, Vol. 23, Núm. 49 (2019) |
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