Welcome! Course Introduction
- What does the course cover?
- Download all course materials
The ascendance of investment banking services
- The importance of history, name, tradition, and reputation
- Early origins of investment banking services
- What is the difference between commercial and investment banking?
- Why do universal banks have a competitive advantage?
- Intrinsic conflicts of interest and the role of Chinese walls
- Quiz #1
- Historical M&A waves
- Three of the most important IPOs in history
The four main areas of investment banking activity
- Capital markets – raising equity and debt capital
- Advisory – M&A and Restructuring services
- Trading and Brokerage – trading with financial securities
- Asset management – the ability to use money to make more money
- Quiz #2
Strategies pursued by investment banks
- Strategies pursued by investment banks
- Relationship vs transaction-based banking
- The accidental investment banker - Book recommendation
Capital markets – Equity capital markets
- Why would a company want to go public?
- Who are the investors in an IPO?
- Coming up with a share price
- What does an IPO timetable look like?
- The IPO syndicate – members and responsibilities
- The pricing process
- Fee distribution among investment banks
- Allocating shares to investors – who gets what
- Taking a long and short position with respect to a security (definition)
- Post-IPO stabilization: Applying the Greenshoe option
- Greenshoe explained – Practical example
- Other ways to place equity capital – SEOs and private placements
- Facebook's IPO - Case study
- Course Challenge #1 - IPO
- Quiz #3
Capital Markets – Debt Capital Markets
- The four different types of bonds
- Why issue a bond?
- The mechanics of a bond offering. Process description
- A particular type of bonds - Junk bonds
- What is securitization and why can it be useful?
- Securitization - explained
- Asset-backed securities: An example of securitization
- Loan syndication – a preferred instrument for most banks nowadays
- Project finance
- Course challenge #2 - Debt offerings
- Quiz #4
Advisory services – Mergers and acquisitions
- Why acquire another company?
- Describing the typical deal lifecycles and buyer companies
- The three types of M&A processes
- A detailed description of an M&A process
- Valuation of target companies
- Payment options in M&A deals
- Financial vs. Corporate buyers
- Course challenge #3 - M&A
- Quiz #5
Advisory services – Restructuring
- Restructuring services – why and when
- The different types of Restructuring
- Course Challenge #4 - Restructuring
- Quiz #6
Trading and Brokerage
- How investment banks profit from Trading and Brokerage
- The different types of financial securities traded by investment banks
- Quiz #7
Asset management
- Why hire Investment banks as asset managers?
- A risk-return comparison of different investments
- Private equity funds
- Quiz #8
A step-by-step guide to Company Valuation
- Why value a company?
- How much is a company worth for an investor?
- The two variables that drive a firm’s value
- The mechanism of Unlevered cash flow calculation
- Introducing a discount factor – Weighted average cost of capital
- Calculating a firm's cost of debt
- Calculating a firm’s cost of equity
- How to find the beta for an unlisted firm?
- Estimating a company’s future cash flows
- The two stages of a DCF model
- Discounting cash flows and terminal value
- Calculating enterprise and equity value
Financial modeling fundamentals
- What is a financial model?
- Why use a financial model?
- Inefficient financial modeling practices
- Efficient financial modeling practices
- Different types of financial models we can build
- The right level of detail we should use when building a 5 or 10-year model
- The right way to approach the forecasting exercise
- Building complete financial models
- Forecasting P&L items
- Forecasting Balance sheet items (1/2)
- Forecasting Balance sheet items (2/2)
DCF Valuation - Introduction
