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Training Course Summary:

This seminar takes valuation techniques much further than the introductory course and considers important contemporary techniques including EVA, the valuation of cash flows in different situations and the application of the techniques in mergers and acquisitions. Case studies from recent deals are included as are practical exercises involving problem areas in valuation. The seminar also includes critiques of the conventional techniques and considers suitable alternatives to be deployed in differing circumstances.

Delegates will be required to bring a laptop with a CD-Rom to the seminar.

Training Course Overview/Content:

Advanced Discounted Cashflow Valuation
Applications - modelling capex flows and working capital movements
Fade rates on long term cashflows
Problems with calculating terminal value and long term growth rates
Estimating asset life
Evaluating the stable growth period
Handling problems of research expenditure and operating lease
payments
Effective and actual tax rates
The concept of normalised earnings flows to avoid abnormal cashflow
patterns
Using multi period terminal value models

Weighted Average Cost of Capital (WACC) and the Discount Rate
Review of capital asset pricing model (CAPM)
How to derive equity risk premiums in different countries
How betas are derived - regressing company and market returns
A bottom-up method of calculating beta reflecting business mix and
leverage
Which beta to choose for company valuation?
Problems with CAPM - is it really still a valid concept?
Alternatives to CAPM
Market cost of risky debt
WACC calculation
Optimal capital structure and gearing risk
Is WACC dead given the capital raising ability of modern firms?

Analysing an M&A Valuation Case
Evaluation of an acquisition target valuation
Use of selected valuation techniques
Comparison of valuation results using DCF and relative price multiples
Understanding the value drivers of the company and the potential
synergies
Comparing the pre-bid price with the actual price paid


Using EVA and CFROI Based Techniques
Correlation to DCF model
Calculation of NOPAT and capital
Typical adjustments for EVA calculation
Understanding the MICAP (market implied competitive advantage
period) concept
MVA as a discounted EVA concept
Cashflow return on investment (CFROI) - the Holt Approach
Comparison of DCF, EVA and CFROI as valuation methodologies