Abstract
At the Strategy Development phase, one of the outputs from the Attractiveness & Opportunities framework is the Entry/Expansion Cases for each new geography/business. At the Business Development phase, some of these will be Organic Growth cases that require the MTP process, while other will be Inorganic Growth cases (i.e. M&A, JV/Alliances) that require a separately dedicated best-practice Inorganic Growth process.
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Both focused on assessing the value of the equity, where the DDM focuses strictly on the expected dividend flow, while the Equity-based DCF focuses on the residual cash flow after meeting all the financial obligations and investment needs.
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Capital adequacy regulation establishes the methodologies allowed for estimation of RWAs, the most common the Foundation vs Advanced Internal Ratings Based approaches, where on the former banks are allowed to use their own modelling to estimate the Probability of Default factor, while on the latter also are allowed to use their own modelling to estimate the Loss Given Default factor and Exposure at Default factor.
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Internal Capital Adequacy Assessment Process report (ICAAP) and Internal Liquidity Adequacy Assessment Process report (ILAAP).
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Gavieiro Besteiro, A. (2022). Inorganic Growth Process. In: Strategy in Action. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-030-94759-0_5
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DOI: https://doi.org/10.1007/978-3-030-94759-0_5
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