Aswath Damodaran1 Session 10: Value Enhancement. Aswath Damodaran2 Price Enhancement versus Value Enhancement.

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Presentation transcript:

Aswath Damodaran1 Session 10: Value Enhancement

Aswath Damodaran2 Price Enhancement versus Value Enhancement

Aswath Damodaran3 The Paths to Value Creation.. Back to the determinants of value..

Aswath Damodaran4 Value Creation 1: Increase Cash Flows from Assets in Place

Aswath Damodaran5 Value Creation 2: Increase Expected Growth Price Leader versus Volume Leader Strategies Return on Capital = Operating Margin * Capital Turnover Ratio

Aswath Damodaran6 Value Creating Growth… Evaluating the Alternatives..

Aswath Damodaran7 III. Building Competitive Advantages: Increase length of the growth period

Aswath Damodaran8 IV. Reduce Cost of Capital

Aswath Damodaran9 Amgen’s Optimal Financing Mix Amgen’s current debt ratio = 10% Amgen’s optimal debt ratio = 30%

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