CORPORATE VALUATION Modern Developments in Theory and Practice. conducted by. Professor Aswath Damodaran LEONARD N. STERN SCHOOL OF BUSINESS, NYU

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1 ALBA EXECUTIVE EDUCATION PROGRAMS CORPORATE VALUATION conducted by Professor Aswath Damodaran LEONARD N. STERN SCHOOL OF BUSINESS, NYU sponsored by TELESIS May 24-25, :00 17:00 N.J.V. ATHENS PLAZA

2 Description This intensive two-day seminar is designed to help practitioners improve their understanding of state-of-the-art techniques of valuing companies. Valuation of corporations and of the investments they undertake lies at the heart of stock selections, equity issuance, mergers and acquisitions and many other aspects of practical investment banking and corporate finance. This two-day seminar on valuation examines the three basic approaches to valuation: the use of multiples and comparables in what can be called relative valuation the use of cash flows and discount rates in discounted cash flow valuation the use of option pricing techniques to value certain types of stocks and businesses The common factors that run across these models, as well as the differences, are discussed. Objective The seminar provides insights into each approach to valuation, together with limitations and caveats on the use of each, as well as extended examples of the application of each. At the the end of the seminar, participants will be able to: Value a firm using traditional discounted cash flow models Value a firm using multiples and comparable firms Analyze and critique a valuation done by a third party on a firm Value problem firms, such as financially troubled firms and start up firms Estimate the effect on value of restructuring a firm Participant Profile Equity research analysts, who are interested in examining alternatives to the multiples that they use or the linkage to discounted cash flow models Corporate financial officers, who want to understand the details of valuation, either because they are planning acquisitions or are interested in value enhancement strategies for their firms Analysts involved in mergers and acquisitions, who would like to acquire a wider repertoire of valuation skills Portfolio managers, who are interested in the effects of corporate restructuring on firm value, and the implications for portfolio management

3 Seminar Outline CORPORATE VALUATION TECHNIQUES An Overview of Alternative Methods The principles of valuation The free cashflows approach The relative valuation approach The option-based approach Pros and Cons of Multiples in Valuation Relative valuation approach: price/earning multiples, price/book valuation multiples, price/sales multiples What are the fundamentals that drive differences in multiples? How do you control for these differences when comparing multiples across companies How do you compare across time and across countries? What is the value of growth? How much higher should multiples be to reflect higher growth? What is the value of a brand name? Applications of the Option Pricing Model on Corporate Valuation Why equity can be regarded as a call option on the firm s assets Approaches to option-based valuation Caveats and limitations Special Cases Firms with negative earnings Natural resource firms Biotechnology firms MANAGING THE VALUE OF THE FIRM Valuation: The Principle Why Use Cash Flow Rather than Earning per Share? Valuation: The Method Computation of Cash Flows Computing the Weighted Average Cost of Capital Computation of Continuing Value Managing For Value: Applications Restructuring Companies Value-Based Management Capital Budgeting: Managing Capital Efficiency How to Create Value via Mergers and Acquisitions

4 Admittance Procedure Please complete, in full, and submit the enclosed application form. You can make a provisional reservation prior to this and we will hold a place for you for 2 weeks. Please note, however, your place is not guaranteed until receipt of your application form. You should apply as early as possible due to limited class size. Priority will be given to early applications. The invoice must be paid in full before you join the seminar. Please fax (or mail) your application to: Lilian Tsertou Executive Education Administrative Director ALBA (The Athens Laboratory of Business Administration) Athinas Ave. & Areos 2A, Vouliagmeni Athens, Greece Tel.: (301) Fax: (301) exed@alba.edu.gr Payment Terms Full Fee: Drs ALBA Corporate Members: Drs ALBA Alumni: Drs A sum of Drs should be deposited by May 15, Participation fee includes tuition, educational material and light meals. Deposits should be made to ALBA s Bank Account number at the ALPHA CREDIT BANK S.A. Volume discounts (not valid for ALBA Alumni): - For more than 2 participants, 10% discount per participant - For more than 4 participants, 20% discount per participant APPLICATION DEADLINE DATE: MAY 15, 2000 Cancellation Policy To avoid any cancellation fee, we must receive your cancellation, in writing, no less than 5 days before the seminar. 50% of the fee will be retained if you cancel less than three days before the seminar, or do not attend the seminar.

5 ASWATH DAMODARAN Associate Professor of Finance Leonard Stern School of Business, New York University B.Com. Accounting, M.S. Management, M.B.A. & Ph.D. University of California, Los Angeles Professor Damodaran has been at NYU since 1986, received the Stern School of Business Excellence in Teaching Award (awarded by the graduating class) in 1988, 1991 and 1992, and was the youngest winner of the University-wide Distinguished Teaching Award (in 1990). He was a visiting lecturer at the University of California, Berkeley ( ), where he received the Earl Cheit Outstanding Teaching Award in He was profiled in Business Week as one of the top twelve business school professors in the United States in He has extensive teaching experience in executive training worldwide. His research interests include the examination of market efficiency, the effects of information and market structure characteristics, as well as equity valuation and issues in real estate investing. Professor Damodaran has published in the Journal of Financial and Quantitative Analysis, the Journal of Finance, the Journal of Financial Economics and the Review of Financial Studies. He has written two books on equity valuation: Damodaran on Valuation, John Wiley and Sons, New York, 1994 Investment Valuation, John Wiley and Sons, New York, 1995 and two on corporate finance: Corporate Finance: Theory and Practice, John Wiley and Sons, New York, 1996 Applied Corporate Finance: A User s Manual, John Wiley and Sons, New York, 1996 He has co-edited a book on investment management: Investment Management (with Peter Bernstein), John Wiley and Sons, New York, 1996 He is currently working on a book on investment philosophies. Created in 1992 with funds supplied by the European Union and Greek corporations, ALBA is a not-for-profit Association of 37 corporations, operating under the auspices of the Federation of Greek Industries (ΣΕΒ), the Hellenic Management Association (ΕΕ Ε), and the Athens Chamber of Commerce and Industry (ΕΒΕΑ). Its mission is to provide a rigorous postgraduate business education of the highest international academic standards, as well as to bring business organizations in close contact with Greek and foreign specialists in all scientific disciplines pertaining to business. ATHINAS AVE & AREOS 2A, VOULIAGMENI, ATHENS - GREECE TEL: (301) FAX: (301)

6 General Information Family name Executive Education Application Form Dr/Mr/Ms First name Male/Female Date of birth Nationality Private address Postcode City/Country Tel. Fax Company Information Job title Company name Company industry/field of activity Your business unit only: Number of employees Parent company Parent company: Number of employees Your business address Postcode City/Country address Tel. Fax How many people report to you: directly indirectly Personal Details Employment history (last two positions only): dates and positions held How did you hear about this seminar? Application signature I hereby accept ALBA s cancellation policy as described in the seminar brochure Date Billing Information Invoice to be sent to Please fax (or mail) to: Lilian Tsertou Executive Education Administrative Director ALBA (The Athens Laboratory of Business Administration) Athinas Ave. & Areos 2A, Vouliagmeni Athens, Greece Tel.: (301) Fax: (301) exed@alba.edu.gr Επωνυµία Εταιρείας:. Επάγγελµα:. ΑΦΜ:. ΟΥ:..... ιεύθυνση:..