The Limitations of the DCF Approach - Online

This module takes a closer look at the limitations of the DCF model and the assumptions used to make it work. Then it shows how to use sensitivity analysis to examine the sensitivity of the base case valuation to changes in the value driver, WACC and terminal value assumptions. Then it shows how to use scenario analysis and Monte Carlo simulations to further refine the valuation.

This course replicates the content from lesson 6 from Business Valuation - Online

This is an asynchronous eLearning course that can be accessed 24/7 from any internet enabled computer. Subscription period for this course is 90 days.

Available TodayOnlineUSD$60.00
Instructional Method:
Self-Study
Level: Intermediate

CPE CREDITS
1
Individuals in credit, investment banking, corporate finance, and sales and trading.
Students will be able to:
  • Identify the impact of changes in value drivers, WACC and terminal value assumptions on a base case valuation through sensitivity analysis.
  • Describe the use of scenario analysis to improve a base case valuation.
  • Recognize limitations of the DCF methodology.
Financial Statement Analysis and Corporate Finance, or equivalent level of knowledge.
"I really enjoyed the interactive tools - they kept me engaged in a subject I would otherwise view as 'boring.'"
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  • Free Cash Flow: A Powerful Decision-Making Metric
    • The Limitations of the DCF Approach
    Topics covered include:
    • Sensitivity of DCF valuations to the assumptions made
    • Using sensitivity analysis to improve the base case valuation
    • Scenario analysis and Monte Carlo simulations
    Duration: 1 hour

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