Fundamentals of Corporate Finance

COMPANY VALUATION

Introduction

• Key players

Foundations of Value

• Distinction Value vs price
• Presentation and consistency of methods
• Financial theory (discounting, Fisher, Gordon & Shapiro, annuity)
• Main concepts (capital market value, company’s value…)

Cost of Capital/WACC

• Basics (definition, concepts, practical issues, database)
• Models for determining the cost of capital
• Specific case of unlisted companies

Actuarial methods (cash flows)

• Free Cash Flow to the Firm
• Other cash flows: Free Cash Flow to Equity, etc.

Multiples

• Definition
• Consistency between multiples

FINANCIAL POLICY AND OPTIMISATION OF BALANCE SHEET

Financial Structure and Accounting Information

• On balance-sheet funding
• Solvency ratios

Impact of financing methods on shareholder’s value

• Economic and financial return, leverage
• Impact of funding on value and shareholders’ risk
• Major types of debt
• How rating impacts the cost of debt

• Practical workshop

• Analyse the financing strategy over several years of a listed company

MERGERS/ACQUISITIONS

M&A Strategies

• Economic analysis of operations (types, motivations, limits, alternatives)
• Financial analysis of operations (M&A investments, constraints, impact on performance)
• Analysis of the new organisation (integrating subsidiaries, structuring holding companies)

• Practical workshop

• M&A Case study

Phases of M&A Operations

• Types of negotiations (listed, unlisted)
• Typical steps from origination to closing
• Closing: contract, price, guarantees, payment and funding methods

• Practical workshop

• Study the funding of an acquisition

LBO AND PRIVATE EQUITY

Main types of Private Equity Operations

• Buying a minority/majority share
• Profitable target or turn around
• Major players in the market

Acquiring a minority stake

• Preference dividend
• Financial instruments: convertible bonds, warrants…
• Calculating the exit IRR

• Practical workshop

• Calculate the dilution caused by convertible bonds
• Study an investment via a holding company

Acquiring a majority stake

• Financial and tax leverage
• Cash flows and valorisation
• Management package
• Typical guarantees and covenants
• Post-crisis structuring modes

The industrial point of view

• Identifying synergies

PROJECT FINANCE

Introduction

• Overview of project finance and recent trends
• Various types of project finance
• Presentation of key players and risk matrix

Presentation of funding sources

• Capital injection
• Debt / bond markets
• Ratio debt / capital

Financial structuring

• Funding plan
• Guarantees
• Ratios, financial modelling: uses and limitations

Legal documentation

• Structure and specifics of contracts
• Effects of risks on involved parties

PPP

• Principles, advantages, inconvenient, potential

• Practical workshop

• Role of the various participants
• Role and organisation of banks at the various stages of the project
• Retained funding method
• Multilateral lenders, hedging political risk