Renting a business is a transaction by which a company gives to the lessee the right to manage a business (or a business unit). The article aims to identify the amount of the rent able to make the agreement economically convenient for both the lessor and the lessee. The literature on this topic has so far identified the “adequate” rent as the product of the value of the business and a given rate of return. This approach is considered here unnecessarily complex and not consistent with the principles of corporate finance. Therefore instead of estimating an “adequate” rent, this paper is proposing to determine a break even rent, representing a minimum threshold for the lessor and a maximum one for the lessee, below or above which, respectively, the agreement would not be economically convenient. From the lessor point of view, the estimate of a break-even rent is obtained by equating the net present value of the rents to the net present value of cash flows that would be obtained by direct running of the business. From the lessee point of view, the break-even rent is the amount that makes equal to zero the net expected cash flows resulting from the management of the business, of course also keeping into account the rents payable. But if the company cannot continue to run the business or to sell it, it has to choose, among different alternative rent agreements, the one which is able to generate the highest net present value. Finally, if you need an ex post evaluation of the rent adequacy in an already signed agreement, we suggest the comparable transactions approach, which is based generally on the range of “market” percentages on the expected average turnover coming from the management of the busines
La stima del congruo canone nell’affitto di azienda: una diversa prospettiva di analisi
RUTIGLIANO, MICHELE;
2011
Abstract
Renting a business is a transaction by which a company gives to the lessee the right to manage a business (or a business unit). The article aims to identify the amount of the rent able to make the agreement economically convenient for both the lessor and the lessee. The literature on this topic has so far identified the “adequate” rent as the product of the value of the business and a given rate of return. This approach is considered here unnecessarily complex and not consistent with the principles of corporate finance. Therefore instead of estimating an “adequate” rent, this paper is proposing to determine a break even rent, representing a minimum threshold for the lessor and a maximum one for the lessee, below or above which, respectively, the agreement would not be economically convenient. From the lessor point of view, the estimate of a break-even rent is obtained by equating the net present value of the rents to the net present value of cash flows that would be obtained by direct running of the business. From the lessee point of view, the break-even rent is the amount that makes equal to zero the net expected cash flows resulting from the management of the business, of course also keeping into account the rents payable. But if the company cannot continue to run the business or to sell it, it has to choose, among different alternative rent agreements, the one which is able to generate the highest net present value. Finally, if you need an ex post evaluation of the rent adequacy in an already signed agreement, we suggest the comparable transactions approach, which is based generally on the range of “market” percentages on the expected average turnover coming from the management of the busines
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
