Overview

Do you want to understand the financial press? Do you want to start a career in finance? Or do you want to improve your knowledge to become an expert in how to create stakeholder value?This course will make sure that you can respond to the answers positively in a very fast pace! Being able to assess whether an investment project is worth executing, it is of crucial importance to master the right techniques. When the investment project is another company to be taken over, failing to making a proper analysis could destroy substantial value. This course includes 10 chapters in the areas of corporate investments: Goals and governance of the firmInvestment vs financing decisionsRole of the financial managerThe investment trade-offEconomic rents and competitive advantageThe investment decisionPositive NPV-rule (including constant growth perpetuity and annuity calculations)Estimation of free cash flowsEstimation of the discount rateWeighted average cost of capitalProject WACC vs. company WACCCapital structure decisionsCost of debtCost of equityCapital assets pricing model (CAPM)Markowitz' mean-variance approachEstimating and interpreting betaArbitrage pricing theoryFama and French (1992) free-factor modelCarhart (1997) four-factor modelWhy financing decisions matterTaking inflation into accountsensitivity checks, scenario analysis and simulationsAgency problemsAgency problems of equityAgency problems of debtOverinvestment problemUnderinvestment problemOther investment techniquesPresent value indexProfitability indexAccounting rate of returnInternal rate of returnMethod of the typical yearPayback periodiscounted payback periodEconomic value added and market value addedEVAMVAComparing EVA, MVA and NPVValuing bonds and the theory of interest ratesCorporate vs government bondsValuing a simple bondTerm structure of interest ratesCredit risk driving yieldsValuing companiesBook value vs. market value vs. intrinsic valueComparable companies approachDividend discount modelDiscounted cash flow modelCapital structure theoriesTrade-off theoryPecking-order theoryJensen's FCF theoryBehavioral finance theoriesFinancial slack WACC in case of multiple sources of financingAdjusted present value approachFinancial benchmarksImportance for coporate finance analysesThe benchmark ecosystemRegulationEuribor and Eonia as well as their reformsAlternative RFRsPrivate equity, venture capital and buyout investmentsDefinitionVenture capital vs. buyoutsTypes of buyouts (leverage buyouts, management buyouts, secondary buyouts, family buyouts, divisional buyouts, etc.)Syndication of buyout investorsBuyouts: value creation?Real options analysisDifference with traditional investment analysisFinancial options analysisValuation using the Black & Scholes formulaValue of a companyBinomial models (method of the replicating portfolio, neutral probabilities approach, etc.)Disadvantages of real options analysisEach of the chapters contains examples and practical advantages and challenges are discussed.

Skills

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