Corporate Finance

The two most important concepts for you to learn in Corporate Finance are WACC (Weighted Average Cost of Capital) and CAPM (Capital Asset Pricing Model). We will start with all the conditions, specifics and limitations associated with them, and then teach you how to best apply them in various industries and for companies in various growth stages.

While we talk about the core concepts of Corporate Finance from both theoretical and practical standpoints, we will also introduce rating agencies’ criteria and take a look at various examples of capital structures first.

We will then talk about some commonly accepted valuation methodologies: Comparable Companies Approach, Precedent Transactions Approach and Discounted Cash Flow Approach (both Exit Multiple method and Perpetuity Growth method). We will not just stop there. Instead, we can continue to elaborate on the pros and cons of each method and introduce a few other approaches for different industries such as LBO and Appraisal methods.

The course will also touch upon various SEC filings and rules and the IPO process. In light of the change in bankruptcy laws and many high-profiled corporate restructuring cases, we will introduce concepts about Solvency Opinion and turnaround situations in the end.

Topics Covered

  1. Theoretical explanations & practical applications of WACC and CAPM. (WACC: Weighted Average Cost of Capital; CAPM: Capital Asset Pricing Model)
  2. Rating Agencies’ perspective on optimal capital structure & impact on WACC
  3. Three commonly accepted valuation methodologies and their pros and cons
    • Comparable Company Analysis (How to locate the universe, choose real comp, make adjustments)
    • Comparable Transactions Analysis (AKA Precedent Transaction Analysis: how to choose real comp)
    • Discounted Cash Flow Analysis (Exit Multiple method vs. Perpetuity Growth method)
  4. Other valuation methodologies
    • LBO
    • Venture Investment
    • Appraisal
    • Liquidation
  5. Misc Topics
    • IPO Process
    • Turnaround Situations
    • Distressed Companies
  6. Solvency Opinion