Evaluating of Loan Guarantees Between Parent and Subsidiary Based on Vulnerable Option

DOI

10.2991/jracr.2012.2.1.6How to use a DOI?

Keywords

Business group, Vulnerable option, Loan guarantees, Credit risk.

Abstract

Loan guarantees between parent and subsidiary is the main related transaction in business group, its correct estimation is the foundation of controlling group’s credit risk. Applying option theory, this paper researches the vulnerable option characters of loan guarantees, gives the valuation model under two different security methods, theoretically analyzes the influence of such critical factors as companies asset value and equity ratio to loan guarantees’ value and provides theoretical basis for the decision-making of loan guarantees.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - JOUR
AU  - Li Li
AU  - Zongfang Zhou
AU  - Xiao Lei
PY  - 2012
DA  - 2012/05/01
TI  - Evaluating of Loan Guarantees Between Parent and Subsidiary Based on Vulnerable Option
JO  - Journal of Risk Analysis and Crisis Response
SP  - 56
EP  - 60
VL  - 2
IS  - 1
SN  - 2210-8505
UR  - https://doi.org/10.2991/jracr.2012.2.1.6
DO  - 10.2991/jracr.2012.2.1.6
ID  - Li2012
ER  -