Course Outline
Corporate Finance and Funding Strategies
Objectives
This two day workshop offers a practical approach to corporate finance. Participants will understand how
funding solutions are driven by corporate finance strategies and learn how corporate finance techniques can
be used to identify business development opportunities for clients and to quantify the benefits of alternative
financing and business solutions. Specifically participants will be equipped to:
• Anticipate management strategic decisions in response to market conditions and shareholders aims and
objectives
• Use valuation techniques to assess possibilities to enhance corporate values
• Identify capital structures and financing alternatives that optimise the cost of capital and shareholder value
within the client’s own risk parameters.
• Recommend value added, client focused changes to corporate and financial strategies that are valueenhancing and appropriate to current market conditions.
Content
Framework for evaluating corporate finance strategies
Introduce a structured framework to help identify and assess a suitable funding strategy
• Structured framework: value parameters, value drivers, corporate strategy, funding strategy, valuations
and funding instruments
• Client driven perspective: identify, evaluate and recommend appropriate strategies.
Value Parameters
Identify the factors which drive management and shareholder decisions and appreciate how shareholders are
remunerated and how managers are evaluated
• Stakeholders’ aims and financial goalposts
• Shareholder value: what are the drivers and how can value be measured?
• Financial, strategic and personal goals and their impact on corporate strategy
• What is the role of management in delivering shareholder value?
• Who are the stakeholders and what is their respective role?
• Management performance measures:
o Cost of capital: (WACC) advantages, disadvantages and alternatives
o Cost of equity: measure systemic and non-systemic risk
o Cost of debt: measure tax benefits and the impact of gearing
• Exercise: identify the key variables and calculate the WACC
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Course Outline
Value Drivers
Identify sector critical success factors, understand the key cash flow drivers of the business and anticipate
funding needs
• Industry considerations and critical success factors
• How sectors react to current market conditions
• Impact of market and sector drivers on company free cash flow
• Identify key business drivers for forecasting: sales, profit and cash flow items
• Illustration case study
Corporate Strategy
Investigate the motivation and rationale behind corporate strategies: mergers and acquisitions, divestments,
diversification, increase leverage and share repurchase
Business strategy
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Motives for mergers and acquisitions
When diversification / break up makes sense…or not
Company Life Cycle: cash, or no cash
Business risk versus financial risk
Financial Strategy
• Leveraged Buy Outs
• Share repurchase
• Illustration case study
Funding Strategy
Estimate the debt capacity of a company, and look at the various methods to determine the optimal funding
strategy
• Target debt structures: market pricing, tenor matching, rating targets, accessibility, cash flow and balance
sheet measures
• Pros and cons of debt financing: selection criteria
• Optimal capital structure: WACC
• Debt capacity: discounted cash flow techniques
• Debt capacity vs. Borrowing capacity
• Alternative sources of debt repayment: asset sales, refinance, equity
• Refinancing risk: acceptable levels of refinancing risk
• Illustration case study
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Course Outline
Valuation
The methodology and application of some valuation techniques and use a simple valuation model to assess
the key drivers behind client's share price
Equity valuation
• Valuation techniques
• Trading and transaction multiples: using P/E, EV/EBITDA, dividend growth model or free cash flow
multiples
• Discounted cash flow valuations: components and assessing results
• Asset valuations
• Economic value added
• Illustration case study
Funding Instruments
Review key features of funding instruments, and try to match a client's funding needs with a funding solution
• Debt profile: amount, tenor, currency, ranking, safeguards and pricing
• Debt instruments debt products
o Bank and syndicated debt products
o Public debt
o 144A Debt securities
o MTN programs
• Hybrid instruments: convertible bonds, debt with warrants, corporate hybrids
• Equity funding
• Exercises and Illustration case study
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