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Learning Outcome Statements PDF Download
|1. Private and public company valuation: similarities and contrasts|
a. compare public and private company valuation;
|2. Reasons for performing valuations|
b. describe uses of private business valuation and explain applications of greatest concern to financial analysts;
|3. Definitions (standards) of value|
c. explain various definitions of value and demonstrate how different definitions can lead to different estimates of value;
|4. Valuation approaches, earnings normalization and cash flow estimation issues|
d. explain the income, market, and asset-based approaches to private company valuation and factors relevant to the selection of each approach;
e. explain cash flow estimation issues related to private companies and adjustments required to estimate normalized earnings;
|5. Income approach methods of private company valuation|
f. calculate the value of a private company using free cash flow, capitalized cash flow, and/or excess earnings methods;
g. explain factors that require adjustment when estimating the discount rate for private companies;
h. compare models used to estimate the required rate of return to private company equity (for example, the CAPM, the expanded CAPM, and the build-up approach);
|6. Market approach methods of private company valuation|
i. calculate the value of a private company based on market approach methods and describe advantages and disadvantages of each method;
|7. Asset-based approach to private company valuation|
j. describe the asset-based approach to private company valuation;
|8. Valuation discounts and premiums|
k. explain and evaluate the effects on private company valuations of discounts and premiums based on control and marketability;
|9. The role of valuation standards in the valuation of private companies|
l. describe the role of valuation standards in valuing private companies.