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Valuation & Equity Analysis |
Overview
This topic overlaps the broader
subject area of corporate finance since valuation is a central
topic in many corporate finance applications.
A great variety of valuation methods,
whether theoretically or empirically based, are used in practice
and these need to be thoroughly understood.
Forecasting future performance
is a key element in all methodologies.For an equity analysis
course there would also be emphasis on analysing and understanding
the business context and the business-strategic factors which
drive performance.
Outline Content
- Required return to shareholders
- Equity risk pricing, CAPM, WACC
- DCF valuation, technical issues
- Geared, ungeared and high growth models
- Cash flow forecasting issues
- Comparative multiples valuation, EV
- Dividend policy, cover and yield, capital
growth and risk
- Review of shareholder value principles
Educational Note
Many students are taught that DCF
valuation is the only “correct” method yet many
practitioners only use multiples. We reconcile the two approaches
and teach participants when to use the one rather than the
other. We also teach the judgemental aspects of valuation.
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