Contents:

Module 1: The Principles: Valuation, Risk and Return Introduction to corporate finance Shareholder value What is corporate finance? Activities involved in corporate finance Risk and return Measuring returns Assessing risk Setting target returns Introduction to company valuation There is no right answer Qualitative analysis Quantitative analysis Asset based valuation Net asset value Liquidation value Replacement cost Valuation based on multiples of comparable companies Price earnings ratio Other multiples Private earnings/growth (PEG) ratio Relative multiples Selection of comparable companies Dividend based valuation Dividend yield Simple perpetuity Constant growth dividend discount (the ‘Gordon’ model) Discounted cash flow valuation Free cash flow Key steps in discounting free cash flows Forecast period Nominal vs real Terminal value General rules for forecasting future cash flows Sensitivity and scenario analysis Constraints of DCF valuation Example of DCF valuation Complications Conclusion on company valuation Appendix: Discounting and compounding Bibliography Answers to exercises Glossary Module 2: Capital Structure Cost of capital Calculation of the weighted average cost of capital Capital structure used to calculate WACC Components of capital Cost of debt Tax effects Leases Fixed income securities Floating rate debt Currency Effect of default risk Untraded debt Convertible bonds Pensions Cost of equity The capital asset pricing model (CAPM) Alternative to CAPM Application of cost of capital Company vs project cost of capital Internal company use of cost of capital Constant or variable WACC Emerging markets Tax Treatment of imputation tax Beta of debt Optimal capital structure Managing cash flows Example of calculating the ‘manageable’ debt for a business Retaining flexibility Market conditions Choosing between sources of capital Restructuring the business Duration of assets and liabilities Other choices in debt Project appraisal Summary Bibliography Answers to exercises Glossary Module 3: Raising Capital Sources of capital Debt vs equity: A case study Raising equity Public or private? Raising public equity Going public: The process Advantages of going public Drawbacks ofgoing public Types of IPO Public offering Private placement Introduction Suitability for a public offering Regulatory considerations Regulatory bodies How regulation works IPO requirements Online regulatory requirements Commercial considerations Track record Management Business plan The IPO process Six to twelve month pre-listing Three to six month pre-listing Within three months of listing Within two months of listing Week of listing The aftermarket Market conditions Targeting investors Attracting retail investors Further share issues Key market differences USA Germany Japan International equity Raising debt Answers to exercises Glossary Module 4: Mergers and Acquisitions Module 5: Management Buyouts Definitions and developments USA The management issue Other MBO variants Investors: the private equity market Origins and development of private equity Venture capital in the USA Unquoted equity in the UK Types of investor Captive Independent Semi-captive Types of private equity investment Start-up finance Early stage finance Expansion, or development, finance Secondary purchase The growth of private equity Returns from private equity The management buyout process Deal generation Initial appraisal Valuing the target and structuring the buyout finance Valuation and buyout structure: A case study Vendor negotiations Due diligence Legal documentation Aftercare Warning signals Remedies Exit Changing markets: the outlook for MBIs Public-to-private transactions Buyout/buyin markets by country France Germany Italy Spain Belgium Answers to questions