12

Valuation of Young Growth Firms and Firms in Emerging Economies

Wolfgang Breuer and Klaus Mark∗∗

RWTH Aachen University

∗∗KfW Banking Group

Chapter Outline

12.1 Introduction

One of the main factors increasing the danger of financial crises is the formation of an asset price bubble. That is, prices paid on the market or in transactions for an asset which has lost the linkage to fundamentals. As we observed after the internet hype in 2000 or after the heavily credit financed housing boom in the United States, the burst of a price bubble can not only have adverse effects on investor confidence, but can also result in a crisis ...

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