Investments as key entrepreneurial action: the case of financially distressed target companies Online publication date: Wed, 05-Sep-2018
by David J. Rapp; Marius Haßlinger; Michael Olbrich
International Journal of Entrepreneurial Venturing (IJEV), Vol. 10, No. 5, 2018
Abstract: Recent entrepreneurship research characterises investments as the very essence of entrepreneurship, supplanting the discovery or creation of opportunities. M&A activity must, therefore, be understood as a key entrepreneurial action. Corresponding M&A decisions require a reliable appraisal beforehand. This is particularly true in case of financially distressed target companies, since such transactions include a high level of uncertainty. The recent financial crisis can be characterised as a cause of companies' financial distress. For the appraisal of such financially distressed companies, literature recommends the same methods used for the appraisal of healthy companies. As will be shown, prevalent appraisal methods cause a profound dilemma when applied for the appraisal of financially distressed companies. Consequently, they need to be substituted by a consistent alternative. The aim of this paper, therefore, is to discuss such an alternative method, which can be consistently applied for the entrepreneurial appraisal of financially distressed - or even bankrupt - companies.
Online publication date: Wed, 05-Sep-2018
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Entrepreneurial Venturing (IJEV):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email email@example.com