The book "Valuation of Companies: Core Issues and Critical Perspective" explores the complexity of valuing firms in emerging and illiquid capital markets, with a focus on Bosnia and Herzegovina. The book critically examines discount rate construction, including the use of country risk premiums, and analyzes how liquidity, corporate governance, and market structure impact firm value. Through theoretical analysis and empirical research, it addresses challenges in applying valuation models such as CAPM and the Build-up Model in underdeveloped markets. The collection also emphasizes how market liquidity shapes company performance, access to capital, and shareholder dynamics.
The book is structured into five chapters, covering key issues: inclusion of country risk in discount rates, the role of liquidity in valuation, challenges of inactive markets, use of premiums and discounts, and the valuation of start-ups under uncertainty. Combining rigorous methodology with practical insight, it offers a vital resource for appraisers, analysts, and decision-makers operating in transitional economies.