Corporate & Project Finance Valuation Techniques for Maximizing Returns & Superior Growth Strategies

Abstract

In this paper we review corporate and project finance techniques used to maximize investor returns and create superior growth strategies. We review the corporate finance concepts and tools used to evaluate investor returns and compare projects. Time value of money concepts can be used to evaluate the free cash flows generated by a project or corporate capital structure. Such studies empower managers to maximize returns, invest in projects that increase the firm value and prune or remedy activities that reduce firm value.

Firstly we introduce the concept that a company or project can be considered as a collection of cash flows and present the tools required to value such cash flows. Secondly we look at corporate & project finance techniques to estimate the cash flows of a broad range of corporate activities and projects. We conclude with a series of case studies where we evaluate a firm’s value, company takeover and acquisition premia and estimate bond financing costs. Finally we consider project finance initiatives, reviewing how to identify profitable investment opportunities and when to accept/reject a project. An Excel example workbook is provided with this paper.