(BQ) Part 2 book “Investment banking for dummies” has contents: Structuring a leveraged buyout, knowing the rules, ten of the biggest debacles in investment banking history, ten ways to improve a discounted cash flow analysis, understanding alternative investments and asset management, and other contents. | Part III Taking Investment Banking to the Next Level Courtesy of S&P Capital IQ Dig into the discounted cash flow analysis in a free article at http://www. . In this part . . . ✓ Perform a discounted cash flow analysis to put a price tag on a company. ✓ Find out how to calculate weighted average cost of capital so you can understand thresholds that define a successful deal. ✓ Discover how leveraged buyouts work in order to appreciate the allure of debt to pay for deals. ✓ See how return on equity is used as a tool by investment bankers so you can see how financial measures can help measure the effectiveness of a company’s management team. Chapter 12 Doing a Discounted Free Cash Flow Analysis In This Chapter ▶ Estimating the value of entire companies by using discounted free cash flow analysis ▶ Determining how to forecast cash flows from companies ▶ Finding out how to estimate a company’s cost of capital ▶ Understanding the capital asset pricing model ▶ Finding out how to value a share of stock T he real meat and potatoes of investment banking involves developing and applying financial models. And financial models aren’t plastic pieces you glue together with pungent-smelling glue. Financial models are built by running numbers to demonstrate the best ways to improve the efficiencies, net incomes, and valuations of businesses. Investment bankers earn their big paychecks by showing CEOs, boards, and management teams that by issuing or buying back certain securities they’ve already sold, going public or going private, purchasing companies or spinning off divisions, and making other changes in the way the firm operates, the value of the firm can be increased. Sell-side investment banking analysts earn their keep by identifying undervalued companies for clients to buy stock of, or by identifying overvalued companies their clients should .
