The participant will gain a solid and practical understanding of:

The pricing of risk
Deriving a discount rate
Errors frequently encountered in DCF valuation
Discounting methodology
Practical application in a case study

Every single decision that a corporate executive makes - be it an acquisition, a divestment, a restructuring, a capital spending initiative, a rationalisation - is a decision based upon the value implied by the decision and the cost or price of its implementation. Accordingly, the ability to determine the value of a decision lies
at the very heart of all of corporate finance.

That is why, having laid down the foundations in unit one, we start the substantive part of the course with the skill of assessing value. The principal difficulty with which we will be grappling is that value is based on the future, not the past, and in the case of corporate decisions (as opposed to fixed income securities), none of us has a perfect vision of what the future holds. We will know with hindsight of course, but decisions have to be made today. Value is not therefore a precise figure – it is a range. We can say that the value is between “x” and “y”. Most of the complexity that we shall encounter in this unit revolves around the uncertainty of future outcomes and the techniques that can be used to address that problem

Unit 2

Unit 2