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FINANCIAL MARKET COURSES

Corporate Valuation- Discounted Cash Flow (DCF) Analysis

Discounted cash flow (DCF) analysis is a valuation technique used by finance practitioners and professionals when attempting to derive the intrinsic value of a company based on projected cash flows. In this course, you will learn how to perform the mechanics of discounted cash flow analysis. This includes determining a discount rate, calculating projected cash flows, computing terminal value, and valuing a company based on DCF analysis.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Describe the theoretical basis of a discounted cash flow (DCF) analysis, including the advantages and other considerations

    Estimate and calculate a discount rate (typically, the weighted average capital of cost) used to present value cash flows

    Calculate the terminal value of a company through two popular methodologies (exit multiple and perpetuity growth)

    Perform a discounted cash flow valuation

    Summarize valuation ranges with comparables analyses and DCF

  • COURSE OUTLINE

    Topic 1: Overview of DCF Analysis

    What is a discounted cash flow analysis?

    Performing a DCF Analysis

    Advantages of a DCF Valuation

    Considerations in a DCF Valuation

    Topic 2: Weighted Average Cost of Capital (WACC)

    What is WACC?

    WACC Components

    o Cost of Equity

    o Cost of Debt

    o Marginal tax rate and market value of debt and equity

    Derivation of WACC

    Topic 3: Discounting Free Cash Flows and Terminal Value

    Projecting Unlevered Free Cash Flows

    Discounting Projected Unlevered Free Cash Flows

    o Basics of the Time Value of Money

    Terminal Value

    o Exit Multiple Method

    o Perpetuity Growth Method

    Topic 4: Analysing Acquisition Multiples

    Valuation Ranges

    Comparing Valuation Ranges

    Topic 5: Deriving a Discounted Cash Flow Valuation

    Deriving a DCF Valuation

    Deriving a DCF Valuation – Example

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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