CALCULATION OF SPECIFIC COMPANY RISK PREMIUM FOR AGRICULTURAL BUSINESS VALUATION

The purpose of the article is to determine which method of company specific risk premium calculation for agricultural companies gives the most correct result in the process of a business valuation. We conduct a study on agricultural holdings valuation methodology and this article builds on our prior...

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Bibliographic Details
Published in:Eurasian journal of business and management 2020-01, Vol.8 (1), p.1-10
Main Authors: Sivitska, Yuliia, Makhmudov, Khanlar
Format: Article
Language:English
Subjects:
Agriculture
Business valuation
Companies
Computation
Corporate profits
Discount rates
Discounted cash flow
Diversification
Investments
Literature reviews
Methods
Professionals
Research methodology
Risk premiums
Stock exchanges
Trading
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Summary:The purpose of the article is to determine which method of company specific risk premium calculation for agricultural companies gives the most correct result in the process of a business valuation. We conduct a study on agricultural holdings valuation methodology and this article builds on our prior study to improve the methodology and justify the appropriate method of Company Specific Risk Premium calculation for agricultural business valuation because properly performed business valuation procedure increases the company's value, its investment attractiveness. For our study, we select large agricultural holdings, leading daily stock trading, from top agricultural producing countries in different parts of the world: Brazil, USA, Ukraine and Australia. Costa Group Holding (CGC) is selected for this article as a company meeting all of the above-mentioned requirements. Compared with the recent researches, the main contributions of the paper are summarized as follows: justified and proved by calculations the correct methodology for calculating of Company Specific Risk Premium in agricultural business valuation for investment purposes.
ISSN:2148-0206
2148-0206
DOI:10.15604/ejbm.2020.08.01.001