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SEMINARS VALUATION | UNTERNEHMENSBEWERTUNG >Finanzplanung | DCF | LBO Strukturierung | Merger Modellierung

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NEWS: RESEARCH PAPERS > Alternative Investments

INITIAL COIN OFFERINGS (ICOS) TO FINANCE NEW VENTURES

Christian Fisch
2018
In an initial coin offering (ICO), new ventures raise capital by selling tokens to a crowd of investors. Often, this token is a cryptocurrency, a digital medium of value exchange based on the distributed ledger technology. Both the number of ICOs and the amount of capital raised have exploded since 2017. Despite attracting significant attention from ventures, investors, and policy makers, little is known about the dynamics of ICOs. This initial study therefore assesses the determinants of the amount raised in 423 ICOs. Drawing on signaling theory, the study explores the role of signaling ventures' technological capabilities in ICOs. The results show that technical white papers and high-quality source codes increase the amount raised, while patents are not associated with increased amounts of funding. Exploring further determinants of the amount raised, the results indicate that some of the underlying mechanisms in ICOs resemble those found in prior research into entrepreneurial finance, while others are unique to the ICO context. >more

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NEWS: TUTORIALS > Valuation Video QoD17

Question of doubt in corporate valuation QoD#17: In case of defaultable debt: Can a firm´s cost of debt exceed its cost of equity? (Bernhard Schwetzler)

Junk bonds may have yields well above 15%. The video discusses whether in this case cost of debt can exceed cost of equity. It also analyses whether bond yields are appropriate measures for the firm´s cost of debt. (November 16, 2018).(videoarchiv QoD#1-17) >more

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STUDIES > Performance

2018 EU-WIDE STRESS TEST RESULTS

European Banking Authority
The 2018 EU-wide stress test involves 48 banks from 15 EU and EEA countries, covering broadly 70% of total EU banking sector assets. The objective of the exercise is to assess, in a consistent way, the resilience of banks to a common set of adverse shocks. The results are an input to the supervisory decision-making process and promote market discipline. >more

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TUTORIALS > Valuation Video QoD16

Question of doubt in corporate valuation QoD#16: Is there a general, more flexible „debt policy“ than MM and/or ME? (Bernhard Schwetzler)

This week´s QoD video introduces a general debt policy for corporate valuation models; the policy adjusts the level of debt towards a certain target value by multiplying the realized future firm value with a constant leverage ratio every k periods. The two well-known debt policies “MM” and “ME” are two polar cases of this general model. The video shows a general equation for the tax shield calculation and also gives a link of the general debt policy to default probabilities. (November 9, 2018).(videoarchiv QoD#1-16) >more

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STUDIES > M&A

MORE RIGOR MEANS BETTER RESULTS IN CHINA’S GLOBAL PURSUIT

Bain & Company
More Rigor means Better Results in China´s Global Pursuit
As they make more overseas acquisitions, Chinese companies are learning the critical nuances that contribute to a deal’s success. As Chinese companies become more experienced at outbound M&A, they gain sophistication in critical capabilities, such as developing a clear investment thesis, due diligence and merger integration. >more

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STUDIES > M&A

DACH KAPITALMARKTSTUDIE

ValueTrust
In this study, ValueTrust provides the newest analyses of cost of capital parameters (risk-free rate, market risk premium) and capital market data (multiples, betas, returns) for the capital markets of Germany, Austria and Switzerland as of 30 June 2018. The study was compiled in cooperation with finexpert and the Institute of Auditing and Sustainability Accounting at the Johannes Kepler University Linz. >more

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UPDATE CAPITAL MARKET DATA

We updated the capital market data (Betas, Multiples, Returns) as to October 15, 2018. For data access, you must be a basic finexpert member.>more

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STUDIES > M&A

FINANZIERUNG VON FAMILIENUNTERNEHMEN IN DEUTSCHLAND

Roland Berger Strategy Consultants
Many German family businesses are successful worldwide. In financial matters, they are regarded as rather risk-averse, solidly equipped with funds and often debt-free. They are often less dependent on banks or other financial backers than comparable companies. However, this is changing because upcoming investments - including digitisation and further internationalisation of their business - exceed their financial firepower. >more

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STUDIES > Performance

CLOSING THE GAP: LEADERSHIP PERSPECTIVES ON PROMOTING WOMEN IN FINANCIAL SERVICES

McKinsey & Company
Where does the financial-services sector stand when it comes to gender equality? To answer the question, this article looks at the experiences of financial-services employees in North America, gathers insights from female senior leaders (those who have reached the level of vice president or above), and reviews best-practice policies and programs to promote diversity and inclusion. >more

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TUTORIALS > Valuation Video QoD13

Question of doubt in corporate valuation QoD#13: Is there anything special about negative Free Cash flows? (simple version) (Bernhard Schwetzler)

Negative Free Cash flows show up quite rarely in corporate valuation and valuators may sometimes be uncertain whether they require an adjustment. This video shows the potential reasons behind the negative sign of FCF and gives some guidance how to properly deal with it. (October 12, 2018).(videoarchiv QoD#1-13) >more

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NEWS: STUDIES > Performance

DAX-AUFSICHTSRÄTE UND VORSTÄNDE: INTERNATIONALITÄT UND VIELFALT

Ernst & Young
The executive boards of DAX companies became somewhat more international last year: between mid-2017 and mid-2018, the number of DAX board members holding a foreign passport rose from 67 to 69 - the proportion of foreign DAX board members thus rose from 35 to 36 percent. Conversely, the number of top managers with German (or dual) citizenship fell from 126 to 123. >more

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STUDIES > Performance

EINEN GANG HOCHSCHALTEN: WIE BANKEN DEN WETTBEWERB IM FIRMENKUNDENGESCHÄFT MEISTERN

Strategy&
Corporate Banking continues to be lucrative for banks in Germany: with an average return on equity of 10%, Corporate Banking made an important contribution to the profitability of banks in Germany last year. In 2017, the institutions in Germany generated income of around EUR 20 billion in the corporate customer segment. Of this, 66% was attributable to traditional lending business and 24% to cash management and trade finance products. The remaining 10% was distributed between investment banking services and financial markets products. >more

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STUDIES > Jobs | Opportunities

UPDATE ARBEITSRECHT SEPTEMBER 2018

CMS Hasche Sigle regularly publishes updates and news concerning the German labor law. Amongst others, this edition features updates on remuneration trends and legal principles. >more

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RESEARCH PAPERS > M&A

DO PRIVATE EQUITY FIRMS PAY FOR SYNERGIES?

Benjamin Hammer, Nils Janssen, Denis Schweizer, and Bernhard Schwetzler
2018
Stylized facts suggest that strategic acquirers can pay for synergies, while private equity (PE) firms cannot because of the missing operating fit with the portfolio company. However, if PE firms initiate buy-and-build strategies, there is potential for an operating fit between the portfolio firm and its add-on acquisitions. Thus, synergistic value could be priced in at entry. We analyze the pricing of 1,155 global PE buyouts and find strong support for a valuation effect from buy-and-build strategies. Our results indicate that PE sponsors pay a premium of up to 47% at entry when the portfolio company acquirers add-ons in the same industry within a two-year time window after the buyout. Consistent with bargaining power theory, the effect strengthens when the portfolio firm has acquisition experience, and when the PE sponsor faces pressure to invest because of unspent fund capital (referred to as “dry powder”) or deal competition. These findings remain robust after addressing alternative explanations, endogenous selection, and reverse causality. They have important implications for the literature on strategic versus financial bidders in takeovers. >more

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MULTIPLE REPORT 2018

finexpert | ValueTrust
The multiple report concentrates on market multiples of the German stock market (the forthcoming third market report will finally concentrate on industry betas and the Svensson curve). The multiple report gives a comprehensive overview over the market valuation of different indices of the German Prime All Share. It combines 5 different multiple definitions, 4 market indices, 15 industry indices, 3 aggregation methods and 2 different time dimensions (trailing vs. forward). Our data coverage starts in 2010 to ensure that data can be used for historical valuations and to exhibit time series trends. Detailed sector compositions for previous valuation data and further information on valuation as well as capital market issues are available at finexpert.info.  (Teaser) >more

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FINEXPERT COMMUNITY

We welcomed our 1.700th member! (August 2018) >more

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STUDIES > Performance

WELCHEN WERT HAT DER BITCOIN?

Deloitte
Bitcoin has the potential to fundamentally change the financial industry, trade and business models of many companies. But how do Bitcoin and Blockchain work exactly? And what do companies need to know in order to benefit from it? The Deloitte experts explain the functionality and possibilities of the virtual currency. >more

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STUDIES > Macro

HOW MUCH WILL A TRADE WAR HURT YOUR COMPANY?

The Boston Consulting Group
The trade dispute between the US and China continues to escalate. Tariffs of 25% have been imposed or announced on $50 billion of imports from China, and tariffs on a further $200 billion are now being reviewed. With some of the world’s largest trading relationships embroiled in an escalating trade conflict, how high might the cost to the global economy and to your firm be? >more

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TUTORIALS > Valuation Video QoD5

Question of doubt in corporate valuation QoD#5: Are there sanity checks for the growth assumptions in the terminal value calculation? (Bernhard Schwetzler)

The assumption about the permanent growth rate in the terminal value calculation is a standard battlefield in transaction negotiations. This video is first introducing the so called Gordon-Shapiro model for terminal value calculation and then shows that it is a powerful tool to check for reasonable growth assumptions and to sort out unreasonable ones. (Sorry for this video being so long; if you already know the Gordon-Shapiro model and are only interested in the sanity check you may jump to 16:40..)
(August 10, 2018). (videoarchiv)  >more

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NEWS: STUDIES > Performance

BLOCKCHAIN IN FINANCIAL SERVICES – MEHR ALS NUR EIN HYPE?

Ernst & Young
When it comes to blockchain technology, German banks, insurers and asset managers tend to wait and see. Hardly any company aims to lead the way as a pioneer in the field of blockchain. Most people also want to keep their hands off cryptocurrencies. These are the results of a PwC survey among managers of 300 banks, insurers and asset managers. >more

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NEWS: STUDIES > Macro

THE GLOBAL FINANCIAL AND MONETARY SYSTEM IN 2030

World Economic Forum
The Global Future Council on Financial and Monetary Systems published this report singling out three key aspects of the risks and challenges associated with the two seemingly opposed forces of decentralization and integration, to which the international financial architecture will need to adapt: 1) regulatory challenges; 2) the transformation of the financial system through digitization; and 3) current macroeconomic risks. >more

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STUDIES > Corporate Finance

WHAT REALLY MATTERS FOR A PREMIUM IPO VALUATION?

The Boston Consulting Group | HHL
Planning for an initial public offering is a lot like planning a wedding. Some factors that affect success, such as investor sentiment, are beyond a company’s control, while others, such as the offer price, can only be dealt with shortly ahead of the big day. But many others should be addressed proactively with thorough planning over an extended period. Indeed, new research by BCG finds that some of the most important factors driving a premium IPO valuation are those for which preparation should begin well before the opening bell rings. >more

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STUDIES > M&A

CHINESISCHE UNTERNEHMENSKÄUFE IN EUROPA: EINE ANALYSE VON M&A DEALS 2006-2018

Ernst & Young
The number of Chinese acquisitions in Europe continues to decline: In the first half of this year, there were 12 percent fewer takeovers and investments in Europe than in the same period last year. The absolute number fell from 126 to 111, and the investment volume even more than halved: From 31.6 to 14.9 billion US dollars. >more

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TUTORIALS > Valuation Video QoD1

Question of doubt in corporate valuation: WACC and target capital structure

Bernhard Schwetzler has started a Youtube channel titled „questions of doubt in corporate valuation”. In homemade video clips of max. length of 10 minutes he discusses and answers technical questions related to corporate valuation that may pop up in the day to day business of transaction advisors.  The first video in this sequence is discussing the question “WACC and target capital structure – gross debt or net debt?” (July 13, 2018) >more

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STUDIES > Performance

BLOCKCHAIN FOR FINANCE

Deloitte
Blockchain for Finance is a practical guide for finance organizations that want to understand options for blockchain and make effective decisions about moving forward. It features more than a dozen Frequently Asked Questions finance teams can use to make sense of blockchain technology, as well as a high-level roadmap for adoption. It also includes a seven-point checklist for CFOs who are thinking about embarking on the blockchain journey. >more

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STUDIES > Performance

EUROPEAN PRIVATE BUSINESS SURVEY 2018

PwC surveyed 2,447 entrepreneurs from 31 European countries for the European Private Business Survey, including 371 from Germany. The results indicate that the shortage of skilled workers is slowing down European economic growth and is becoming an ever greater problem for SMEs. And not only that: Overwhelming regulation and bureaucracy, the sluggish expansion of the digital infrastructure, the uncertainties caused by the Brexit and increasing protectionism are big concerns for medium-sized companies. >more

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STUDIES > Performance

VENTURE CAPITAL: TREIBSTOFF FÜR INNOVATIONEN, WACHSTUM UND WETTBEWERBSFÄHIGKEIT

Roland Berger Strategy Consultants
There is not enough venture capital in Germany. This means that there is a lack of funds for start-ups and innovations, which are indispensable for surviving the competition with other technology locations. In this study, Roland Berger, the Internet Economy Foundation and the Bundesverband Deutscher Kapitalbeteiligungsgesellschaften show how critical the situation is and what can be done. >more

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STUDIES > Corporate Finance

UNDERSTANDING THE BLOCKCHAIN REVOLUTION!

Deutsche Bank Research
When reporting on bitcoin, blockchain and cryptocurrencies these days, the speaker is faced with the question: Shall he discuss the technology or move directly to the presentation of the social and economic implications? Conveying a complex technology in just a few minutes is risky. In Alice's rabbit burrow, the speaker and his audience quickly lose track of each other. But the audience may also be left clueless by the direct presentation of the potentially revolutionary implications. In the face of this dilemma and the complexity of cryptosystems, we will try to shed light on the issue by means of metaphors. >more

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RESEARCH PAPER > Corporate Finance

BEYOND FINANCING: CROWDFUNDING AS AN INFORMATIONAL MECHANISM

Jordana Viotto da Cruz
Using a unique dataset built with publicly available data from Internet-based sources, and after controlling for alternative explanations, we empirically show that even when not successful on crowdfunding, thus not accessing capital, project owners may still decide to release the product in the market if contributions suggest positive valuation of the “crowd”. >more

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STUDIES > Alternative Investments

EUROPEAN PRIVATE EQUITY ACTIVITY REPORT 2017

Invest Europe
This annual survey, undertaken on behalf of Invest Europe, collects comprehensive and robust activity data on fundraising, investment and divestment from about 1,250 private equity and venture capital firms in Europe. The 2017 statistics cover 89% of the €640bn capital under management on the European market. >more

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STUDIES > Accounting

THE OUTLOOK FOR GLOBAL TAX POLICY IN 2018 Ernst & Young

Global and US tax reform, and the adoption of numerous international tax policy changes in 2018, are providing a catalyst for countries to pursue tax competitiveness in new and innovative ways. This is according to the EY The outlook for global tax policy in 2018, which combines insights and forecasts from EY tax policy professionals in 41 jurisdictions worldwide. >more

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GERMAN TAKEOVER REPORT 2018

finexpert | ValueTrust
The finexpert-ValueTrust German takeover report 2018 covers all takeover bids according to the German takeover code WpÜG of the year 2017 and provides extensive information on relevant variables like bid types, premia offered, market reaction of target’s and (if available) on bidder’s stock prices. In addition our extensive database allows to compare last year´s figures of these variables against the moving average of the preceding years and thus to highlight trends and long term developments. Finally the finexpert German takeover report contains a unique and extensive analysis of fairness opinions and statements of management and
supervisory board of the target company (§27 WpÜG), allowing for a detailed analysis of the relationship of these factors upon target stock price reaction and success rates of the takeover bid. After discussing potential shortcomings of “traditional” success definitions of takeover offers in this report we introduce a new success measure that takes potential bidder toeholds into account and perform additional analyses. Our results indicate 2017 as a year with a lower number of offers, but due to one large bid, with significantly above average bid volume. This is due to the public exchange offer to Linde AG made by Linde PLC preceding the merger between Linde and Praxair. Premium offered and target CARs were below average in 2017. This report contains a detailed description of events surrounding the takeover offer for STADA Arzneimittel AG, where Value Trust was acting as financial advisor.  (Teaser) >more

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STUDIES > Corporate Finance

FINANCING THE DEEP TECH REVOLUTION

European Investment Bank
The European Investment Bank (EIB), with Oliver Wyman’s support, has developed and published a study on “Financing the Deep Tech Revolution”, identifying the obstacles to access-to-finance for deep tech companies as well as recommending policy measures to address them. >more

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STUDIES > M&A

RISING TENSION: ASSESSING CHINA'S FDI DROP IN EUROPE AND NORTH AMERICA

Baker & McKenzie
In 2017, China's global outbound investment dropped for the first time in more than a decade as policy changes in China and host economies cooled M&A activity and created a shift in the industries and geographies targeted by Chinese investors. This report provides insight into how and why China’s outbound investment patterns are changing in the world's two highest income regions: Europe and North America. >more

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STUDIES > Performance

BANKING ON BLOCKCHAIN: A VALUE ANALYSIS FOR INVESTMENT BANKS

Accenture
Many analysts liken the disruptive potential of blockchain's distributed ledger technology — a new type of database system — to that of the Internet. In addition to reshaping the financial infrastructure as we know it, this research pinpoints where blockchain will have the biggest impact on a bank's bottom line. To conduct the study, Accenture joined forces with McLagan, a business unit of Aon plc, and world-class capital markets benchmarking provider. >more

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STUDIES > Performance

BANKENREPORT DEUTSCHLAND 2030

Oliver Wyman
The German banking system faces radical changes: In 10-15 years, Germany will only have around 150 to 300 banks with sustainable and successful business models, compared to today's 1,600. Competition is increasing and more and more foreign banks, fintechs, market infrastructure providers and global technology groups are entering the German banking business. At the same time, digitization is making customers increasingly demanding. >more

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STUDIES > Corporate Finance

EFFIZIENZ DER KREDITPROZESSE IN DEUTSCHEN KREDITINSTITUTEN 2017

PwC
How efficient are credit processes in German banks? What are the implications of digitization in the lending business? Which distribution channels are still needed for lending? This PwC study addresses these and other questions. The results show that developments in retail and wholesale banking are far apart. And fewer houses than expected are already implementing a viable digitization strategy. Only a missed opportunity - or at least a danger for a successful future? >more

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STUDIES > Performance

DEUTSCHLANDS BANKEN 2017: METAMORPHOSE IM LAUFENDEN BETRIEB

Bain & Company
The structural change in the banking sector continues with increasing speed: on average, 36 bank branches close down operations every week in Germany and one bank even leaves the market. At the same time, the number of employees in the banking industry is falling by more than 400 per week. >more

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STUDIES > M&A

CHINESISCHE UNTERNEHMENSKÄUFE IN EUROPA: EINE ANALYSE VON M&A DEALS 2006-2017

Ernst & Young
In 2017, Chinese buyers invested a record amount of money in German companies with the total M&A volume amounting to just under 13.7 billion dollars. At the same time, the number of takeovers by Chinese investors declined by 21 percent to 54 transactions. >more

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STUDIES > Macro

THE GLOBAL RISKS REPORT 2018

World Economic Forum
Each year the Global Risks Report works with experts and decision-makers across the world to identify and analyze the most pressing risks that we face. As the pace of change accelerates, and as risk interconnections deepen, this year’s report highlights the growing strain we are placing on many of the global systems we rely on. >more

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BETA REPORT 2017

finexpert | ValueTrust
The beta report contains cost of capital developments over the last year, 1 and 2 Year Beta estimates since 2015 for the Prime All Share indices as well as Yield Curve estimates. The report is meant to be a comprehensive reference for cost of capital estimates where finexpert users can find sector-specific information for valuation purposes. We also provide an update about the newest academic research on cost of capital and related topics. The paper that we present discusses the use of gross versus net debt for unlevering/re-levering the beta factor (Teaser). >more

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TRAINING > Tutorials

Zwei Probleme der Unternehmensbewertung: Kapitalstruktur und Wachstum

Prof. Dr. Bernhard Schwetzler
This video shows a presentation of Professor Bernhard Schwetzler at the 11th annual meeting of the EACVA about common issues in corporate valuation: capital structure and beta adjustments with respect to the use of gross or net debt, as well as growth and the "steady state" assumption. >more

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STUDIES > Alternative Investments

PRIVATE EQUITY UND LEVERAGE IN DEUTSCHLAND - AKTUELLE ERGEBNISSE

HHL Leipzig Graduate School of Management
This presentation by Prof. Dr. Bernhard Schwetzler reports the results of two recent studies on leverage and default probabilities of private equity portfolio companies in Germany. The results indicate that static leverage ratios such as debt to total assets increase moderately after the PE entry, whereas dynamic measures such as debt to EBITDA are largely unaffected. Further results suggest that the business model of the PE firm, in particular its industry specialization, is crucial for default probabilities. >more

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GERMAN TAKEOVER REPORT 2017

finexpert | ValueTrust
The finexpert-ValueTrust German takeover report 2017 covers all takeover bids according to the German takeover code WpÜG of the year 2016 and provides extensive information on relevant variables like bid types, premia offered, market reaction of target’s and (if available) on bidder’s stock prices. In addition our extensive database allows to compare last year´s  yxfigures of these variables against the moving average of the preceding years and thus to highlight trends and long term developments. Finally the finexpert German takeover report contains a unique and extensive analysis of fairness opinions and statements of management and supervisory board of the target company (§27 WpÜG), allowing for a detailed analysis of the relationship of these factors upon target stock price reaction and success rates of the takeover bid. Our results indicate 2016 as a year with an average number of offers, but with above average premia and bid volume. The latter is due to the extraordinary merger attempt of Deutsche Börse and London Stock Exchange. Market reaction on the offer announcements was on average 20.8% on the targets (-+1 day-CAR). Our Fairness Opinion analysis reveals an increasing importance of consultants as providers. (Teaser) >more

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RESEARCH PAPERS > Corporate Valuation

THE IMPACT OF TERM STRUCTURE AND TERM TRANSFORMATION STRATEGIES ON THE CORPORATE VALUE OF BANKS – A COMPARISON BETWEEN CONTROLLING-BASED VALUATION CONCEPTS AND DCF-MODEL

Bernhard Schwetzler
2016
This paper compares two different concepts for bank valuation: a controlling-based concept splitting the bank into three parts (credit-, deposit-, and treasury bank) and valuing them separately, against a standard DCF-Flow to Equity valuation model. The controlling-based concept allows to separate current realized and future expected interest income generated by term transformation, i.e. by exploiting differences between different maturities via maturity mismatch of assets and liabilities, from the bank´s excess interest income (or interest savings) against market interest rates with the same TM. The results show that depending on the shape of the term structure and the term transformation strategy chosen by the bank´s management significant differences between the corporate values derived by the two valuation models may occur when being applied upon the same bank. >more

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STUDIES > Corporate Finance

Valuation of innovative business models

Bernhard Schwetzler
A talk on the valuation of innovative business models given at the annual meeting 2016 German Academic Association for Business Research (VHB) at the technical university of Munich TUM. (in German) >more

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FINEXPERT GERMAN TAKEOVER REPORT 2016

The  finexpert - ValueTrust German takeover report 2016 covers all takeover bids according to the German takeover code WpÜG of the year 2015 and provides extensive information on relevant variables like bid types, premia offered, market reaction of target’s and (if available) on bidder’s stock prices. In addition our extensive database allows to compare last year´s figures of these variables against the moving average of the preceding years and thus to highlight trends and long term developments. Finally the finexpert German takeover report contains a unique and extensive analysis of fairness opinions and statements of management and supervisory board of the target company (§27 WpÜG), allowing for a detailed analysis of the relationship of these factors upon target stock price reaction and success rates of the takeover bid. > more (Teaser) >more

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HOW MUCH WILL A TRADE WAR HURT YOUR COMPANY? > more
WELCHEN WERT HAT DER BITCOIN? > more

 

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