Federico Beltrame is Lecturer in Banking and Finance
in the Department of Economics and Statistics, University of Udine, Italy. He
holds a PhD in Business Science from the same University. His main research
interests are related to SMEs' cost of capital, banks' capital structure and
Mutual Guarantee Credit Institutions.

Daniele Previtali is post-doc fellow and lecturer at
Luiss Guido Carli University, Rome, Italy. He holds a Ph.D. in Banking and Finance
from University of Rome, Tor Vergata, Italy. In 2012, he was a visiting PhD
candidate at Stern School of Business, New York, USA. His main research
interests concern banks valuation, banks' capital structure and innovation.

Provides a constructive comparison of equity and asset side methods

Presents an Adjusted Present Value model

Offers a more accurate and more specific approach to valuing banks

Contents

List of Tables

List of Figures

Acknowledgements

About the Authors

Preface

Introduction

1. Valuation in
Banking: issues and models

1.1 Introduction

1.1.1 A different role
of equity: the regulatory constraints

1.1.2 The role of debt

1.1.3 Loan loss provisioning
and charge-offs

1.1.4 Cash flow
estimation

1.2 Valuation Methods
of Banks: a critical review

1.2.1 Discounted cash
flow models

1.2.2 Excess returns
valuation

1.2.3 Asset and
mixed-based valuation

1.2.4 Relative market
valuation

1.2.5 Contingent claim
valuation

1.3 Conclusions

2. Value, Capital
structure and cost of capital: a theoretical framework

2.1 Introduction

2.2 Limitations of the
Equity Side Approach

2.3 An Asset Side
Approach to Banks Valuation: An Introduction

2.4 Banks' Cost of
Capital and the Modigliani-Miller Propositions

2.5.1 Valuation scheme
without taxation and growth

2.5.2 Valuation scheme
with tax benefits

2.5.3 Valuation scheme
with taxation and growth

2.5.4 The AMM: an
overview

2.6 The Restatement of
Modigliani and Miller's Theories for the Banking Industry

2.6.1 Absence of taxes

2.6.2 Presence of taxes

2.7 Consistency of the
AMM Model with Excess Returns Models

3. Measuring the Cash
Flows of Banks: the FCFA Asset Side Approach

3.1 Introduction