Session 1:

Shareholder Value

• The concept of maximising shareholder value

• Objectives of company valuation

• The risk/return trade-off

• Exercise: Match the risk/return profile of equity and debt securities

• Strategic risk: concepts and methods of assessment - Porter’s Five Forces, BCG Growth / Share Matrix, company life cycle, etc.

• How the market values companies and what causes price change

• Case-study: Perceptions of value of a UK company that avoided takeover

Session 2:

Using comparable multiples

• Traditional valuation multiples (P/E) and newer multiples (PEG ratios, etc.)

• The concept of Enterprise Value and related multiples – EV/EBITDA, EV/EBIT

• Case-study: Estimating valuation based on historic and prospective multiples

• Which multiples for which sectors and which time periods?

• Case-study: Selecting appropriate multiples for different industry sectors

Session 3:

Which companies are comparable?

• Criteria for selecting comparable companies

• Case-study: Comparable companies for Virgin Mobile, premium vs discount, implications for pricing at flotation and then as an acquisition target for NTL

• How to decide if the sample of companies and ratios makes sense

• Case-study: Selecting comparable companies for a flotation candidate

Session 4:

When to use other valuation methods

• Asset based, dividend discounting, Sum of the Parts, Real Options

• Case study: What UK companies can dividend discount models help to value?

• Case Study – Assessment Criteria used by Equity Fund Managers

Session 5:

Discounted Cash Flow Analysis (DCF)

• Why discount cash flows?

• What assumptions tend to have most impact on a DCF valuation

• Case study: The impact of different assumptions on DCF valuation

Session 6:

Bringing it all together

• How to draw conclusions from valuation results

• The difference between value and price

• Case study: Reviewing the results of a valuation analysis using different methods and recommending a target price range

Course Close