CPE Self-Study
Methods of Business Valuations
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Online: 1.5
This CPE course provides you with the technical knowledge required for the CGMA exam related to strategic management accounting. It focuses on business valuation and methods used to calculate such values.

CGMA designation holders qualify for additional discounts on this product.

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CPE On-Demand
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Product details

Who Will Benefit?

  • CGMA exam candidates
  • Management accountants wanting to develop skills in corporate financial strategy

Topics Discussed

  • Asset valuation (e.g. historic cost, replacement cost and realisable value)
  • Forms of intangible assets (including intellectual property rights, brands, etc.) and methods of valuation
  • Share prices (quoted on stock market or private sale for non-quoted entities)
  • Earnings valuation (e.g. price/earnings multiples and earnings yield)
  • Dividend valuation (e.g. dividend growth model, including estimating growth from past or forecast figures and including non-constant growth assumptions)
  • Discounted free cash flow valuation (including taxation, risk-adjusted discount rate, foreign currency cash flows and sensitivity analysis)
  • Ideas of diversifiable risk (unsystematic risk) and systematic risk
  • Capital asset pricing model (CAPM), including the meaning and derivation of the component and, the ability to gear and un-gear betas
  • Calculation of an appropriate cost of capital for use in discounted cash flow analysis (e.g. cost of equity or WACC) by reference to the nature of the transaction (e.g. division or an entire entity), including use of CAPM, dividend valuation model and MM WACC formula
  • Efficient market hypothesis and its relevance for the valuation of quoted entities
  • Impact of government incentives on entity value (e.g. capital or revenue grants)
  • Strengths and weaknesses of each valuation method
  • Validity of the results for use in decision making according to the nature of the target entity (e.g. a division, a whole entity, quoted or unquoted)

Learning Objectives

When you complete this course, you will be able to:

  • Calculate the value of a whole entity (quoted or unquoted), a subsidiary entity or division using a range of methods including taxation
  • Compare the valuation methods used in the context of a given scenario

This CPE course is included in the 50+ hours of CGMA Strategic Management Accounting. It can also be purchased individually or as a part of Corporate Financial Strategy.

This CPE course examines the process of business valuation and factors that influence the value of a business. It explores the three basic methods of valuing business. Asset based valuation is calculated by book value, replacement value, and break-up/net realisable value. Earnings based valuations rely primarily on the P/E valuation method. Cash flow valuation uses the dividend valuation model (DVM) theory and the discounted cash flow (DCF) method. The course also explores the risk adjusted cost of capital equation, the capital asset pricing model (CAPM), and the efficient market hypothesis (EMH).

Ratings and reviews

Kaplan Publishing Limited


American Institute of CPAs

The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 418,000 members in 143 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting.

The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, and offers specialized credentials for qualified professionals who concentrate on personal financial planning; forensic accounting; business valuation; and information management and technology assurance. With The Chartered Institute of Management Accountants (CIMA), it offers the Chartered Global Management Accountant (CGMA) designation, which sets the global benchmark for quality and recognition in management accounting.

The AICPA and CIMA also make up the Association of International Certified Professional Accountants (the Association), which represents public and management accounting globally, advocating on behalf the public interest and advancing the quality, competency and employability of CPAs, CGMAs and other accounting and finance professionals worldwide.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.

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CPE credits
: 1.5
NASBA Field of Study
Management accounting experience or the equivalent
Delivery Method
QAS Self-Study
Course acronym
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