Valuation of Companies
Overview of Company Valuation
Day 1:
Coverage and purposes of valuation
Parties potentially interested in valuation
Overview of the principal valuation models
Valuing flexibility
Traditional Valuation Models
Limits of accounting datao Earnings Multiple approaches to valuation
Asset based valuations
Dividend based valuations
Opportunity cost
Forecasting Free Cash Flows and Calculating Horizon Values
General principles of forecasting
The forecast period and horizon values
Explicit and transition period forecasts
Relationships between variables
Impact of inflation
Impact of ‘lumpy’ investment flows
Estimating free cash flow
DCF Models
Basic DCF models
Hurdle rates
DCF with constant growth into perpetuity
Deciding the timeline
Applying DCF to the free cash flow
The importance of terminal value
Calculating terminal value
Relationship between accounting profit and present values
Case study to complete a company valuation
Day 2:
Applying Company Valuation for Strategic Decision Making
The Cost of Capital in DCF Models
Definition of cost of capital
Historical perspective
Capital structure
Gordon’s Growth Model
Capital Asset Pricing Model
Key components of CAPM
Risk free rate
Market risk premium
Company ‘beta’
Calculating the Weighted Average Cost of Capital
Risk premia and hurdle rates
Alternatives to CAPM
Valuing companies for takeover or merger
Acquisition Strategy
Niche acquisition opportunities to deliver strategic objectives
Horizontal integration
Vertical integration
Diversification
Key focus areas for acquisition
Why most M & A deals do not deliver promised value
Valuing acquisition targets
Estimating free cash flow
Identifying opportunities for synergy
Evaluating the free cash flows
DCF
Relevant hurdle rate
Terminal values
Ensuring value delivery from acquisitions
The first 90 days
Delivering the synergies
Effective integration
Ongoing post acquisition management
Participants will do an evaluation of an acquisition proposal
October 25-26, 2010
Naples,Italy
Fee 3100 Euros
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