Foundations of Finance
Time Value of Money
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Know how to make cash flows comparable over time
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Get familiar with the basics of compounding and discounting
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Understand Present Values and Future Values
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Be able to compute the present and future value of any cash flow or cash flow stream.
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Know how to handle perpetuities and annuities.
NPV and Other Investment Criteria
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Get to know and understand the Net Present Value (NPV).
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Learn how to use the NPV rule in investment decisions.
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Understand how and why managers who follow the NPV rule tend to increase the financial value of their firm.
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Know how to compute and interpret the Internal Rate of Return (IRR) of projects.
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Know what the Payback is and understand why investment decisions based on payback are often flawed.
Project Cash Flows
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Know what the Net Cash Flow (NCF) is and we can estimate the NCF of any investment decision.
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Learn how to incorporate interactions with other projects in the computation of the NCF.
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Understand that only the cash flows matter that are caused by a specific capital budgeting decision.
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Know how to treat inflation consistently in project valuation.
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Understand how non-financial goals such as environmental, social, and governance (ESG) factors can be included in project valuation using an Adjusted Present Value (APV) approach.
Risk, REturn, Cost of Capital
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Understand the trade-off between risk and return.
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Learn how we can reduce the risk of an asset via diversification.
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Appreciate the basics of modern portfolio theory.
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Get to know the Capital Asset Pricing Model (CAPM) to estimate expected returns.
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See how to obtain the Weighted Average Cost of Capital (WACC), the most relevant discount rate in project and firm valuation.
Firm Valuation
Fundamentals of Firm Valuation
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State-of-the art methods for any company valuation situation.
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In-depth discussion of Discounted Cash Flow (DCF-WACC) and Relative Valuation (Multiples).
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Know useful shortcuts to quickly assess the value of a firm.
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Focus on practical implementation with countless case studies, spreadsheet templates, and online tools
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Learn how to get from the Valuation to the actual Deal.
Financial Analysis for Managers
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Learn how to read and analyze financial statements and how to tell the "financial story" of a company.
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Conduct quick health checks using financial ratios.
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Understand the strengths and limitations of financial ratios.
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Know the main determinants of Return on Equity (ROE).
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Build the foundations for key financial decisions.
Financial Planning for Managers
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Determine a firm's cash flows from its balance sheets and income statement.
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Get familiar with different types of cash flows, in particular operating, free (firm), and residual cash flow.
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Learn how to forecast cash flows and compile a financial plan.
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Use Monte Carlo Simulation to transform financial plans into powerful management tools.
Valuation Multiples (Relative Valuation)
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Get to know valuation multiples, the practically most relevant valuation method.
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Understand the key success factors of using relative valuation.
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Use multiples for enterprise valuation and equity valuation.
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Know key implementation challenges and their solutions.
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Get to know the Price-Earnings (PE)-Ratio and the implicit assumptions we make when using it.
Cost of Capital and Valuation
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Learn what the cost of capital is and how it is affected by financial leverage.
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Understand the various ways to capitalize free cash flows.
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Learn how to estimate the Weighted Average Cost of Capital (WACC) in any valuation situation.
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Learn how to estimate the cost of capital in an international context.
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Understand the simple mistakes we often make when "unlevering" and "relevering" betas.
Continuing Value (Mature firm valuation)
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Understand the relevance of Continuing Value (Terminal Value) in virtually any firm valuation.
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Learn how growth, investments, and value creation are related in the long-run.
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Use a simple model to estimate continuing value.
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Learn how to use this simple model to value mature firms.
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Know alternative ways to estimate continuing value.
Startup Valuation
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Understand the many challenges we face when trying to value startups.
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See how to adjust the DCF-approach in specific situations.
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Learn how Venture Capitalists (VCs) value startups.
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Understand the difference between valuations and issue prices.
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Learn how to use real option considerations to value startups.
Financing Decisions and Deal Structuring
Capital Structure Decisions
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Learn how to use financial decision making to improve firm value.
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Understand how and why the firm's capital structure (debt-equity mix) matters.
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Learn how a firm can adjust its capital structure.
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Understand the implication for debt and equity valuation.
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Know the key considerations behind an optimal capital structure.
Startup Financing and Deal Structuring
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Learn how to get from a valuation to the actual deal.
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Know the key elements of financial deal making, namely returns, control, and liquidity.
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Learn how to read or draft financing term sheets.
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See how deal structuring makes deals possible and more valuable.
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Learn how to use deal structuring as a "truth serum" and to align the incentives of the deal parties.
Payout Policy
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Understand the key questions surrounding the payout decision: How much to pay out, and how to return money to shareholders?
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Know the various forms of payout, in particular dividends and share buybacks.
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Know how and why payout matters.
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See how a firm's financing policy, investment policy, and payout policy are related.
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Know the relevant steps towards a sustainable payout policy.
Mergers and Acquisitions (M&A)
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Know the main forms of takeover and their relevance.
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Understand the basic M&A process.
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Know the key considerations to determine the offer price.
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Use a simple model to understand the ownership and value implications of any deal structure.
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Learn why it is difficult to create value with M&A.
Initial Public Offerings (IPOs)
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Get to know the most prestigious way to raise capital: the Initial Public Offering (IPO).
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Know the costs and benefits of going public.
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Understand the IPO process.
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Know how an IPO allocates value and ownership (who makes how much money).
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Know the costs and benefits of alternative going public strategies, including direct listings, direct public offerings, or initial coin offerings (ICOs).