Introduction to Corporate Finance (Mergers & Acquisitions)

Value a business with multiples and discounted cash flow analysis. Compare peers using revenue or EBITDA, and forecast future cash flows for intrinsic valuation in corporate finance.

Compare public company comps, precedent transactions, and discounted cash flow analysis to value a business for acquisition. Align relative valuations with intrinsic stand alone value and potential synergies.

Enterprise value equals the whole business value including net debt, while equity value equals enterprise value minus debt plus cash; key metrics include revenue, EBITA, and price to earnings.

Explore how free cash flow, perpetual growth rate, and cost of capital drive a business's net present value and intrinsic value, shaping value versus price in mergers and acquisitions.

Explore discounted cash flow analysis, building a DCF model in Excel, valuing cash flows with terminal value and present value, and learning the weighted average cost of capital (WACC).

Outline the acquisition process from start to finish, compare strategic and financial buyers, and analyze soft and hard synergies, the value of financial synergies, and transaction costs in M&A.

Execute a ten-step acquisition process from strategy and criteria to target search and planning, then valuation, negotiation, due diligence, financing, and integration.

Compare strategic buyers and financial buyers in mergers and acquisitions, detailing operating synergies, horizontal and vertical expansion, leverage-driven returns, and bid competition.

Value the target as a standalone business, estimate enterprise value and synergies (hard and soft), then deduct transaction costs to maximize net value against the purchase price.

Navigate the M&A transaction environment to structure a deal by weighing outside factors - accounting, taxes, bidders, legal forms, antitrust - alongside market conditions and the business plan, culminating in the central deal.

Investigate the capital stack for mergers and acquisitions, from senior and subordinated debt to equity, and see how balloon payments, mezzanine financing, and payment-in-kind loans enable leveraged buyouts.

Describe the types of debt financing for corporate transactions, explain how leverage affects internal rate of return and return to equity holders, and outline structures used in mergers and acquisitions.

Evaluate debt capacity in mergers and acquisitions using balance sheet and cash flow measures, including debt-to-EBITDA and cash interest coverage, guided by EBITA stability and entry barriers.

Explore the senior debt portion of the capital stack, its two to three times debt to ebitda or two times interest coverage, and how amortization shifts value to equity.

Explore subordinated debt, from high yield bonds to mezzanine debt with warrants, and see how equity exposure dilutes returns while evaluating debt to EBITA and equity funding constraints.

Explore equity financing in acquisitions, covering types of equity funding and the role of private equity funds, plus exit strategies to achieve targeted returns.

Explore the equity portion of the capital stack in buyouts, covering shareholder loans, preferred shares, CCPOA, and ordinary shares, and how PE funds leverage four to seven year horizons.

Analyze exit considerations for a private equity fund, including timing, management readiness, capital structure, and business strategy, with exit paths like IPOs or strategic sales and internal rate of return.

Explore how shareholder loans, preferred shares, and equity ratchets align incentives between private equity firms and management, balancing upside with liquidation preference and performance-based ownership adjustments.

Explore the CFI career map to compare banks (sell side), buyside institutions, corporates, and public accounting firms, and discover roles like investment banking, private equity, and treasury.

Craft a personal story for finance interviews via firm research and networking; prepare for three financial statements, time value of money, valuation methods, building a financial model, and behavioral fit.

Discover the top five career hacks for corporate finance and mergers and acquisitions. Join investment clubs, network via CFA, publish on Seeking Alpha, and excel with Model Off.

Advance your career by exploring courses from the Corporate Finance Institute and taking advantage of free trial enrollments to continue learning.