Home  Journals  Finance and Credit  4(484) - 2012 January

The account of event risk at calculation of demanded profitableness of own capital of the company

Available online: 24 January 2012

Subject Heading: Risk-management

JEL Classification: 

The necessity of accounting for the asset's event risk in determining its intrinsic value is discussed in the article. The main attention is dedicated to the way of accounting for the event risk. The additive model, which incorporates the event risk in the discount rate, is the most suitable for these purposes. This model adequately describes the susceptibility of the asset to the event risk and is not mathematically complex.

Keywords: event risk, required rate of return, event study, intrinsic value

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ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

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