Naslov
Cash flow valuation in an absence of market parameters – case study Croatia

Autori
Ercegovac, Roberto ; Pezelj, Marijana

Izvornik
Journal of accounting and management (1848-137X) 3 (2013), 2; 35-46

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, ostalo

Ključne riječi
cash flow evaluation, fair value, fair value accounting, financial assets

Sažetak
Fair value of financial assets and liabilities is derived in a net value of expected cash flow of the related item. In the efficient financial market value of the assets is equal to the market price. In the absence of market efficiency it is necessary to develop valuation model based on comparative mark to market assets or on appropriate financial model. Model has to bee developed on market parameters that fair value pursues to the objective value out of arbitrage facilities. In developing net present value of expected cash flow it is necessary to match individual cash flow with yield curve in a term, currency, and risk structure. Developing Croatian financial market does not provide parameters for net present value calculation of expected cash flows of assets and liabilities in implementing mark to model principles of valuation. In modeling fair value of cash flows three main parameters have to be known: expected cash flows, respective yield and related credit risk premium. This paper will explain usable model of long term yield curve development for Croatian national currency using Vasicek and Nelson-Siegel standards, and the opportunities of country risk premium calculation as the base of the valuation model evolution.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA