Instructor
Ian
Giddy has taught finance at NYU, Columbia, Wharton, Chicago and
in 40 countries abroad for the past three decades. He was Director of
International
Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. The
author of more than fifty articles on international finance, he has
served
at the International Monetary Fund and the U.S. Treasury and has been a
consultant with numerous corporations and financial institutions in the
U.S. and abroad. As a banker and consultant he has been involved in the
growth of the ABS market in the USA, Europe and Asia. He is the author
or co-author of The International Money Market, The Handbook
of International Finance, Cases in International Finance,
Global Financial Markets, Asset Securitization in Asia and The
Hudson
River Watertrail Guide.
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The Session
In this half-day session we
review the key
corporate finance decisions
- investment, financing and risk management - that contribute to
shareholder
value. Running through the key computations and numbers of corporate
finance,
we discover the assumptions behind common models and ratios used in
valuation
of a company, in mergers and and other forms of corporate financial
restructuring. We apply this to
several case studies, revealing how a pharmaceutical firm can create
value by applying these principles of risk-adjusted valuation-based
investment and funding decisions.
The session will include case studies of actual coporations and their financings,
as
well as hands-on
exercises, and, where possible, discussions of the special challenges facing a global pharmaceutical company like Pfizer.
Outline
of Session
Time
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Topics
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Resources
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09:00
-10:30 |
The Job of the CFO
- Why finance matters -- and why most companies are undervalued
- The 5 principles of corporate finance
- The corporate value drivers, and how to change them
- Example: Novartis
- Measuring value: implementing the free cash flow approach
- What "free cash flow" means
- Valuing a company at the equity level versus whole-firm value
- How business risk combined with financial risk influences investors' return expectations
- Investment decision analysis
- Acquisitions: the good, the bad and the ugly
- Case study: "The Acquisition of Celtel." Participants evaluate the business and financial merits of an investment.
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Presentations
pfizer-cfo
pfizer-financing
Articles
The
financial markets
Notes on cost of capital
and capital
structure .
Case studies
Celtel
Pfizer
Pfizer Financials
Spreadsheets
Celtel solution
wacc.xls
SAP
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10:45
-12:30 |
Value Creation Through Corporate Financing
Decisions
- How companies are financed - and how they should be financed
- Evaluating sources of capital for improved decision making
- Examples: Vivendi, Novartis, Pfizer
- Methods of effective cost analysis: how to measure the cost of debt and the cost of equity
- The weighted-average cost of capital
- Example: Motorola
- Finding the optimal capital structure: debt, equity or hybrid?
- Case
study: "Financing Pfizer."
We will estimate the effective cost of capital for Pfizer at various
levels of debt, and consider how the financial structure fits the
company's business strategy.
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