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- Title
La valutazione del capitale economico in presenza di partecipazioni reciproche.
- Authors
Bertazzi, Luca; Bogarelli, Paolo
- Abstract
While reciprocal ownership has been investigated in Italy and abroad since the 1950s, very little research considers the phenomenon in the context of corporate valuations. Yet the phenomenon is widespread in Italy and abroad, particularly in Japan and China, both in listed companies and in small family firms. The first part of the work outlines the phenomenon of reciprocal ownership in its economic and juridical aspects, in order to underline its profiles of relevance in the Italian panorama. In the second part, a preliminary explanation is given as to why the presence of reciprocal ownership only constitutes a problem when using business valuation methods that require the analytical valuation of assets. In particular, after presenting the valuation of companies with methods that consider both expected incomes and company assets, this paper clarifies why the value of cross-shareholdings cannot be calculated using a linear and sequential approach. Subsequently, relying on a business case emblematic of the phenomenon, the work investigates how to calculate the value of firms in the presence of reciprocal shareholdings, by identifying the equation to be solved. As for the methodology, it is a mathematical theoretical work aimed at identifying the solution of a problem that cannot be solved in a closed-form with an analytical method. Furthermore, the work presents an empirical development, as the correctness of the results obtained is verified by applying the calculation procedure to a business case emblematic of the phenomenon under investigation. Our study aimed to contribute to the corporate valuation literature, both from a theoretical and an empirical point of view. To this end, this study deepens and presents: a) the relevance of reciprocal shareholdings in the context of company valuations. b) the impossibility of analytically evaluating the assets in a linear way due to reciprocal shareholdings; c) the system of equations that solves the problem referred to in the previous point; d) the software to be used by practitioners for the corporate evaluation; e) the verification of the results obtained by applying the software to a business case.
- Publication
Economia Aziendale Online, 2023, Vol 14, Issue 2, p447
- ISSN
2038-5498
- Publication type
Article
- DOI
10.13132/2038-5498/14.2.447-470