Risk Management Predictions for 2022: Seeking Alternatives in Times of Uncertainty

Given the unprecedented times of the last two years, it’s reasonable for risk practitioners to be cautious.  Typically, risk managers can make calculated forecasts based on the collected data from the years prior. This has always been an effective tool in calculating and managing risk, but the COVID-19 pandemic has caused a rift in the usage and reliability of traditional risk models. Continue reading Risk Management Predictions for 2022: Seeking Alternatives in Times of Uncertainty

The Merton Model

The Merton model is a common credit risk model used for evaluating a firm and determining if it will remain solvent.  This simple model is specifically useful in situations where traditional DCF and relative valuation models are ineffective, such as distressed firms, natural resource firms, and startups/high growth firms whose value is primarily based on their rights to a product, service, or innovative technology.  Continue reading The Merton Model