DCF Valuation Model

DCF Valuation — Course Description

Discounted Cash Flow | WACC | Terminal Value | Equity Bridge

Course Overview

This course builds a complete, interview-ready Discounted Cash Flow model from first principles. You will learn how to project free cash flows, construct a WACC from scratch using CAPM, calculate terminal value using both the Gordon Growth Model and the Exit Multiple method, and bridge from Enterprise Value to an implied share price. The course follows TechCo Inc. — a publicly listed technology company — through every stage of the DCF process.

By the end of this course, you will be able to build a fully integrated DCF model, explain every assumption and its economic rationale, defend your valuation in a live interview, and immediately spot the most common mistakes analysts make.

What You Will Learn

• Why the DCF is the foundation of all intrinsic valuation and when to use — and not use — it
• How to construct Unlevered Free Cash Flow starting from NOPAT and why levered FCF gives the wrong answer
• How to build WACC from scratch: risk-free rate, equity risk premium, beta levering and unlevering, after-tax cost of debt, and market value weights
• How to calculate Terminal Value using both the Gordon Growth Model and the Exit Multiple method, and how to cross-check the two
• Why Terminal Value dominates DCF value (60–80% of EV) and what that means for your assumptions
• How to bridge from Enterprise Value to Equity Value to implied share price using the correct sign convention
• How to build a two-variable sensitivity table in Excel (WACC × terminal growth rate) and present a valuation range rather than a single point estimate
• How to identify and avoid the six most common DCF mistakes that appear in real investment banking work

Course Structure

ModuleTopic

1. What is a DCF? — Foundations & Core Logic

2. Free Cash Flow — The Engine of Value

3. WACC — Building the Discount Rate

4. Terminal Value — The Dominant Driver

5. Equity Bridge — From EV to Share Price

6. Sensitivity Analysis — Stress Testing the Model

7. Excel Model Guide — Before & After Tabs

8. Common Mistakes & Interview Traps

9. Q&A Bank — 30 Advanced Interview Questions

10. Glossary — Key Terms & Formulas

Case Study — TechCo Inc.

A publicly listed technology company with $1,620mm in projected Year 1 revenue growing at 9% annually, 18% EBIT margins, 6% CapEx intensity, and a 21% tax rate. WACC is built at 9.3% using a 1.20 levered beta, 4.50% risk-free rate, and 5.50% equity risk premium. Terminal value is calculated at a 2.5% perpetual growth rate under the Gordon Growth Model and cross-checked against a 9.5x EV/EBITDA exit multiple. The model produces an implied share price of $10.75 against a current market price of $10.20 — a 5.4% upside.

Excel Model — What's Included

The course includes a fully built Excel workbook with 10 tabs and 151 formulas:

• Before tabs — student practice with ??? placeholders and formula hints
• After tabs — complete answer keys with all formulas and cross-sheet links
• WACC Builder — dedicated tab walking through every component step by step
• Sensitivity Tables — WACC × terminal growth rate, traffic-light colour coded
• Q&A Bank — 30 questions embedded directly in the model
• Glossary — 20 DCF terms with definitions and formulas

Who This Course Is For

• Investment banking analysts building valuation models for the first time
• Equity research associates who want to strengthen their DCF fundamentals
• Corporate finance professionals preparing for internal or external valuation work
• MBA students and CFA candidates studying equity valuation
• Anyone who has been told their DCF is wrong but isn't sure why

Prerequisites

A basic understanding of the three financial statements is helpful but not required.

No prior modelling experience is assumed — the course builds every concept from the ground up.

Familiarity with basic Excel navigation is sufficient to begin.

Level: Intermediate — Advanced

Format: PDF Study Guide + Excel Model (Before/After)

Q&A Bank: 30 Interview Questions with Full Model Answers

Case Study: TechCo Inc. — Implied share price $10.75 vs market $10.20