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Become a Financial Planning Analyst
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Module 7
Discounted Cash Flow (DCF) Valuation
1
Projecting Unlevered Free Cash Flow (UFCF)
Project unlevered free cash flow (UFCF) from the outputs of an integrated three-statement model.
2
Calculating the Cost of Capital
Calculate the Cost of Equity using the Capital Asset Pricing Model (CAPM) and the after-tax Cost of Debt.
3
Calculating WACC with Target Capital Structure
Calculate the Weighted Average Cost of Capital (WACC) based on a target capital structure.
4
Terminal Value: Perpetuity Growth vs. Exit Multiple
Estimate terminal value using both the perpetuity growth method and the exit multiple method.
5
Calculating Enterprise Value
Discount the projected free cash flows and terminal value to derive the enterprise value.
6
From Enterprise to Equity: Calculating Implied Share Price
Construct a bridge from enterprise value to equity value and calculate the implied share price.
7
Data Tables for Valuation Sensitivity Analysis
Perform sensitivity analysis on key valuation assumptions (e.g., WACC, growth rate) using data tables.
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Financial Performance and Profitability Analysis
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Relative Valuation and Market Comparables