2. Teaching Team of Advanced Financial Management 1 2015-9-13 1 Chapter 2 Corporate Valuation Brief contents: Corporate value Corporate valuation Corporate value-based management

3. Teaching Team of Advanced Financial Management 2 2015-9-13 2 Concepts and Features of Corporate Value Main Forms of Corporate Value Influencial Factors of Corporate Value Expressions of Corporate Value 一、企业价值概述 Corporate Value

4. Teaching Team of Advanced Financial Management 3 2015-9-13 3 1.Concept of Corporate Value 2.Financial Connotation of Corporate Value 3.Features of Corporate Value Concept and Features of Corporate Value

5. Teaching Team of Advanced Financial Management 4 2015-9-13 4 Corporate value means how much a corporation costs or how much a corporation can be sold. 1.Concept of Corporate Value

6. Teaching Team of Advanced Financial Management 5 2015-9-13 5 （ 1 ） Total value （ 2 ） Liability value （ 3 ） Equity value （ 4 ） Corporate value 2.Financial Connotation of Corporate Value

7. Teaching Team of Advanced Financial Management 6 2015-9-13 6 （ 1 ） Corporate value is the total value of resources owned or controlled by corporation （ 2 ） Corporate vale depends on corporations’ future profitability 3.Features of Corporate Value

8. Teaching Team of Advanced Financial Management 7 2015-9-13 7 （ 3 ） Corporate value reflects time value and risk value （ 4 ） Corporate value is the evaluation results by market （ 5 ） Corporate value depends on many factors,very dynamic

9. Teaching Team of Advanced Financial Management 8 2015-9-13 8 1.Book value 2.Intrinsic value 3.Market value 4.Liquidation value 5.Replacement value Main Forms of Corporate Value

10. Teaching Team of Advanced Financial Management 9 2015-9-13 9 1.Future value-added ability 2.Corporate risk 3.Corporate going-concern period 4.Other factors(non-financial) Influencial Factors of Corporate Value

11. Teaching Team of Advanced Financial Management 10 2015-9-13 10 1.Market pricing 2.Investments pricing 3.Cash flow pricing Expressions of Corporate Value

12. Teaching Team of Advanced Financial Management 11 2015-9-13 11 Implication of Corporate Valuation Requirements and Significance of Corporate Valuation Procedures of Corporate Valuation Methods of Corporate Valuation Choice of Valuation Methods Corporate Valuation

13. Teaching Team of Advanced Financial Management 12 2015-9-13 12 Corporate valuation means analyzing corporate future financial conditions and assets value,that is,evaluating and calculating going concern corporations’ value Implication of Corporate Valuation

14. Teaching Team of Advanced Financial Management 13 2015-9-13 13 1.Requirements should be obeyed during corporate valuation 2.Significance of valuation Requirements and Significance of Corporate Valuation

15. Teaching Team of Advanced Financial Management 14 2015-9-13 14 （ 1 ） Mathematical （ 2 ） Entirety （ 3 ） Accuracy （ 4 ） Definite （ 5 ） Unanimous （ 6 ） Comparative 1.Requirements should be obeyed during corporate valuation

16. Teaching Team of Advanced Financial Management 15 2015-9-13 15 （ 1 ） Valuation in financial management （ 2) Valuation in corporate mergers （ 3 ） Valuation in investment portfolio 2.Significance of Corporate Valuation

17. Teaching Team of Advanced Financial Management 16 2015-9-13 16 1.Fundamental work of valuation 2.Performance forecasts 3.Choice of valuation methods 4.Carry out valuation 5.Results test and interpret Procedures of Corporate Valuation

18. Teaching Team of Advanced Financial Management 17 2015-9-13 17 1.Book Value Method 2.Discounted Cash Flow Method 3.Market Value Method 4.Option Princing Medel Methods of Corporate Valuation

19. Teaching Team of Advanced Financial Management 18 2015-9-13 18 （ 1 ） Assets Net Book Value （ 2 ） Book Return Method （ 3 ） PV of Return Method 1.Corporate Book Valuation

20. Teaching Team of Advanced Financial Management 19 2015-9-13 19 （ 4 ） EVA Model Corporate value=investments+PV of EVA EVA=NOPAT-After-tax dollar cost of capital used to support operations =EBIT(1-Corporate tax rate)-(Operating Capital)(WACC)

21. Teaching Team of Advanced Financial Management 20 2015-9-13 20 （ 1 ） Discounted FCF Method （ 2 ） Corporate Constant Growth Model （ 3 ） Nonconstant Growth Model （ 4 ） Life Cycle Model 2.Corporate Discounted FCF Method

22. Teaching Team of Advanced Financial Management 21 2015-9-13 21 (1)Capital Asset Pricing Model (2)Q Model Corporate Value ＝ Q×Asset replacement cost 3.Market Value Method

23. Teaching Team of Advanced Financial Management 22 2015-9-13 22 4.Option Pricing Model

24. Teaching Team of Advanced Financial Management 23 2015-9-13 23 1.Different evaluation methods can make corporate valuation results different 2.Many subjective factors affect valuation result 3.Avoid one valuation method’s one-sidedness Choice of Valuation Methods

25. Teaching Team of Advanced Financial Management 24 2015-9-13 24 4.Weighted average values evaluated by different methods 5.Detailedly examine target corporation, consider all kinds of risky factors,then determine true corporate value

26. Teaching Team of Advanced Financial Management 25 2015-9-13 25 Necessity of value-based management Main Features of value-based management Ways to realize value-based financial management Corporate Value-based Management

27. Teaching Team of Advanced Financial Management 26 2015-9-13 26 1.Corporate value is the starting point and core of modern financial management theory 2.Corporate value-added is the basic goal of financial management 3.Value-based financial management is the ideal model of modern corporations Necessity of value-based management

28. Teaching Team of Advanced Financial Management 27 2015-9-13 27 1.Future value is the core of value-based management 2.Value-based management pays close attention to cash flow management 3.Human value realization is the essence of value-based management Main Features of Value-based Management

29. Teaching Team of Advanced Financial Management 28 2015-9-13 28 4.Capital operation should be combined with merchandise operation 5.Value-based financial decision is the premise of corporate value-based management 6.Corporate value-based management is integrative and comprehensive management to maximize stakeholders’ interests

30. Teaching Team of Advanced Financial Management 29 2015-9-13 29 1.Adhere to corporate value maximization goal,formulate value maximization strategies 2.From the viewpoints of value-added driving forces, decide on value-added ratios, such as long-term and short-term ratios,financial and non-financial ratios, main operation and concurrent operation goals Ways to realize value-based financial management

31. Teaching Team of Advanced Financial Management 30 2015-9-13 30 3.Formulate value-based budgets, determine steps to realize those value- added ratios in future, combine value idea with every act.

32. Teaching Team of Advanced Financial Management 31 2015-9-13 31 4.Value-based accounting system is the carrier of value-based management, recreating accounting is necessary 5.Determine value-based performance measures and remunuration systems,supervise performance according to value-added ratios,encourage employees to achieve their goals

33. Teaching Team of Advanced Financial Management 32 2015-9-13 32 2015-9-13