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Course
and Examination Format
Part 2: Advanced Business Valuation
(Waived for ASA-Business
Valuation; CBA; CFA; CPA/ABV; CVA/AVA)
A course of study designed to provide a
comprehensive understanding of the principles and concepts of business
valuation.
The course of study for CDBV Part 2 will
involve advance preparation consisting of reading assignments and the
answering of multiple choice questions from the course material. The material
will be mailed four weeks prior to the class. The three-day and a half
day course will consist of three days of instruction, followed by a four-hour
exam on the fourth day.
Requirements to take Part 2:
| 1. |
Successfully complete Part 1 or have
it waived because of certification as a CIRA or CTP.
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| 2. |
Part 2 will be waived for those applicants that
have one of the following certifications: ASA-Business Valuation,
CBA, CFA, CPA/ABV, CVA. |
Part 2 Course content:
| Cost of Capital—Equity |
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- CAPM vs. build-up method
- Determinants of betas
- Issues with using historical betas
- Levering and delevering betas
- Market risk premiums
- Alpha risk (unsystematic risk)
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| Cost of Capital—Debt |
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- Use of long-term financing rates
- Use of ratings/default spread
- Estimating synthetic ratings
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| Weighted Average Cost of Capital |
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- Capital structure weightings
- Internal consistency and the iterative process
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| Income Approach |
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- Firm valuation vs. equity valuation
- Capitalized cash flow and discounted cash flow
methods
- Cash flow projections in the discrete period
- Estimating terminal value
- Ensuring internal consistency of model parameters
- Testing for reasonableness/common errors
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| Market Approach |
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- Guideline company, similar transactions &
historical internal transactions methods
- Performing comparative financial analysis
- Calculating, adjusting and applying multiples
- Decomposing the market multiple
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| Asset Approach |
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- Approaches to valuing assets and liabilities
- Common net asset value adjustments
- Intangible assets
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| Other Valuation Topics |
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- Synthesizing results
- Ownership characteristics and discounts/premiums
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