Executive Training Workshop on Real Options

Monday-Wednesday, February 21-23, 2005, Lagos - Nigeria

Day One

8.30     Review of Traditional Methods of Valuation

             - Discounted Cash Flow Methods

             - Valuation by Multiples

             - Capital Budgeting Analysis

10.30   Coffee Break

11.00   Fundamentals of Option Pricing

             - Binomial Modeling of Asset Prices

             - Terminology of Options and Option Pricing

             - Risk Neutral Valuation

             - Pricing American Options

13.00   Lunch

14.00   Spreadsheet Applications

             - Building Binomial Trees in Excel

             - Introduction to VBA Procedures

15.30   Case Studies in Oil

             - Assessing Proven Undeveloped Reserves

             - Mutually Exclusive Oil Sands Extraction Processes

17.00   Session Ends

Day Two

8.30     Valuing Flexibility with Real Options: General Overview

              - How to Recognize Real Options

              - NPV Limitations and Managerial Flexibility

              - Common Types of Real Options

              - Valuing Real Options: Basic Principles

              - Benefits and Areas of Application

10.30   Coffee Break

11.00   Case Applications and Problem Structuring in Real Options

              - 3-step Real Options Valuation (ROV) Process

              - Sampler of Various Applications

              - Glaxo: Valuing R&D and Patent Rights

              - Eli Lilly: Marketing Expansion Strategy

              - Problem Structuring: Examples & Applications

13.00   Lunch

14.00   Growth Option Analysis and Firm Valuation

              - Market Prices, DCF and Implied Market Growth Premium

              - Top-down Statistical Growth Analysis

              - Bottom-up Strategic Options Analysis

15.30   Case Studies on Real Options and Security Analysis

              - Echostar Communications: Comprehensive Valuation in Media

              - MediGene AG: Bottom-up Valuation in Pharma

              - Tiscali: Valuing an Internet IPO

17.00   Session Ends

Day Three

9.00     Mini Case Studies on Real Options and Security Analysis

10.30   Coffee Break

11.00   Real Options and Capital Structure

             - Interaction of Corporate Investment and Financing

             - Optimal Borrowing, Debt Covenants and other Security Design Issues

13.00   Lunch

14.00   Other Issues with Implementing Real Options

              - Agency Problems

              - Asymmetric Information

              - Executive Compensation

15.30     Workshop ends