The growth of financial markets in Asia and Latin America and the allure of globalization has made the analysis and assessment of country risk a critical component of valuation in recent years. In this paper, we consider two issues. The first is the whether country risk should be considered explicitly in valuation, and if the answer is yes, how to do it.
By Prof. Aswath Damodaran
Summary:
•Country Risk and Company Exposure: Theory and Practice
•Estimating a Country Risk Premium
•Measuring Country Risk Premiums
•Default Spreads + Relative Standard Deviations
•An Alternative Approach: Implied Equity Premiums
•Estimating Asset Exposure to Country Risk Premiums
•Determinants of a company's exposure to country risk