Capital Allocation and Valuation

Capital Allocation and Valuation --- This course covers the topics of capital allocation, valuation, and performance evaluation. The course starts out by discussing the criteria used for capital allocation, such as net present value, internal rate of return, and economic value added. It introduces the student to the notion of risk and shows how it is related to the cost of capital. It then illustrates the capital allocation process by stressing the importance of cash and highlighting the cash flow drivers. The course also covers the application of the above concepts to valuation of companies. It concludes with a discussion on how to evaluate the performance of companies and operating units from the perspective of shareholder value creation. The goals of the course are to teach general managers how to integrate financial information into strategic and business decisions.