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Rating investment projects of user-defined duration under regular redemption schedule: A new approach

Vol. 25, Iss. 10, OCTOBER 2019

Received: 23 September 2019

Received in revised form: 7 October 2019

Accepted: 21 October 2019

Available online: 30 October 2019

Subject Heading: INVESTING

JEL Classification: G24, G32

Pages: 2414–2432

https://doi.org/10.24891/fc.25.10.2414

Brusov P.N. Financial University under Government of Russian Federation, Moscow, Russian Federation
pnb1983@yahoo.com

ORCID id: not available

Filatova T.V. Financial University under Government of Russian Federation, Moscow, Russian Federation
mfilatova@fa.ru

ORCID id: not available

Orekhova N.P. Southern Federal University (SFEDU), Rostov–on–Don, Russian Federation
fet_mir@bk.ru

ORCID id: not available

Kulik V.L. Financial University under Government of Russian Federation, Moscow, Russian Federation
venya.kulik@mail.ru

ORCID id: not available

Subject This article discusses the rating of investment projects of arbitrary duration with even repayment of debt.
Objectives The article aims to modify the methodology of the rating systems of investment projects and develop a fundamentally new approach to the methodology of project rating.
Methods For the study, we used the modern theory of capital cost and capital structure by Brusov-Filatova-Orekhova (BFO theory), its modification for rating needs, original BFO investment models, and rating coefficients.
Results The article presents a modification of the methodology of current project rating systems and a developed approach to the methodology of project rating.
Conclusions and Relevance The presented modification of the methodology of current project rating systems will help improve the correctness of rating of investment projects and make it more objective. The developed approach can be used by rating agencies, both international and Russian when rating investment projects.

Keywords: project rating, discounting, financial flows, Brusov-Filatova-Orekhova theory, coverage ratios, leverage ratios

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