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2.2.2.4. The relation of market and accounting value of assets

The relation of market and accounting value of assets of the company, also known as factor Q, settles up as the sum of a market value of the capital and accounting cost of obligations to accounting value of assets of the company [44].

The given indicator allows to compare a market estimation of the company to the cost indicated in financial reports. The high indicator says that market participants positively evaluate prospects of the company and its ability to generate cash flows in the future and establish the extra charge to a company book value. Thus, high significance of factor Q makes positive impact on the restoration rate that is confirmed with empirical researches.

In P.Varma's work [108] indicator Q has positive correlation with the restoration rate. The companies with indicator Q above average significance on the market for a year before a default had higher rates of restoration. Partly, it can be explained that, despite a default, market participants continue to trust in potential of growth of the company and its ability to generate profit.

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A source: Antonova Ekaterina Njaimovna. Estimation of the recovery rate for corporate bonds of Russian issuers. Thesis for the degree of candidate of economic sciences. Moscow 2013. 2013

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