AFM 371 Lecture Notes - Dividend Discount Model, Discounted Cash Flow, Mergers And Acquisitions

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM 371
• Professor: Neil Brisley

Document Summary

Finish off convertible bonds fron classnote 17 (tuesday) Firm valuation, with a view to looking at m&a and other deals => ross ch23 for background. Revise wacc and pv of a growing perpetuity. Revise also the concept of free cash flow" (parts of ross ch. Private equity investments, leveraged buy-outs (lbos & mbos), Mergers & acquisitions (hostile vs. friendly, cash vs. shares) Investment bankers, accounting firms (m&a advisory, corporate finance), cbvs, due diligence : due diligence inspections done by accountants for investment bankers. Changes of ownership & control, structure & form, focus & strategy. Synergy: the rationale of takeover bids is 2 + 2 = 5 ; create value. Interested in economic value, not just accounting value, so by adjustments they mean valuing up or down. Asset value techniques: e. g. , book value + adjustments. How useful is a balance sheet? compared to fmv. Dividend discount models (ddm) to value the equity.