Illustrative course outlines

At OTC we believe in tailoring our courses to meet each client’s specific requirements.  The illustrative course outline below gives an indication of the type of course content that we’ve been asked to deliver. For more information call us on +44 20 7700 3330 or email

Strategy & Leadership Finance & Commerce Investment Banking

Advanced valuation - beyond two-stage DCF models

What is covered?

This course gives an overview of more advanced valuation techniques focusing on why two stage DCF might be insufficient in some circumstances and how to refine the DCF approach to take account of those circumstances. In addition alternative valuation approaches will be introduced and explained. These approaches will then be compared and contrasted with the results from DCF and the advantages and disadvantages of the various valuation techniques will be highlighted.

Who will benefit?

Analysts who regularly produce or update models and want to both look beyond the traditional DCF models and consider valuation from a different perspective.

Course content

Two stage DCF reprised: rationale and methodology
    • The sensitivity of model outputs to assumptions
    • Cost of capital
    • Terminal values
    • Forecast period and growth rates
Three - phase models
    • The three period approach explained
    • How to estimate time varying WACC
    • Implications of three - phase modelling for valuation
    • When is three - phase models most useful?
    • Advantages and disadvantages of disaggregating inputs
Adjusted present value
    • Capital structure and implications for value
    • How to value a firm using the APV approach
    • Discounting cash flows at the unlevered cost of equity
    • Estimating the value of the tax shield
    • Why APV can be useful - the LBO example
    • Sensitivity of valuation to assumed tax rates – some issues
    • How to reconcile APV outputs to DCF outputs
Economic value - added (EVA)
    • How to calculate EVA
    • Asset base measurement and accounting issues
    • Defining returns and the appropriate cost of capital
    • Reconciling EVA to NPV – common issues
    • Gaming with EVA- incentive skews and mitigation strategies
    • EV and market value
    • Calculation of CFROI - advantages and disadvantages
    • CFROI and firm value  - some conflicts
    • CFROI and market value


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