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WL of cr 94 ementBoa independence + Maiati inkependent __4o__f aia Cit ope or ta » i “0 4 mp n i ‘i a4 Geng ene a. enute ; 4 thet ph anh glte—_of____bith)_prandas ee ene r ° Wother considerations + Include stuuclure enw aur oy) inteiackio ran “sell = evaluations of evaluations P= outside | + Gvalustng Corporate _(novemnane __foliies Procedures . i ‘ Resuloe dia “4 e and engagement 4 Prats with Wmpani th aK panies __Can H__ investors understand the bandits 4 lorpatate a Yoveraane slices 4 pcacadutes y achivisin telus fo ckeategicn used ty \afeholder pe a. » ack jn a desired S manner aaJ Page No,_l#4__ | Dote_c/ ath a | Saal € _Goaate goub nance include a Nhe + Wiawth ia feturn ohn eg 3 BY ata : Mighee € sustainable cs 7 sfounsiaile Lege Shae edlacmance + lwetbel test 4 apa TE Gampensation [ Naking cali 1 Executive Gompensarion ‘Linked te getlimance = with Qeulback provisions « + Shaishelder___vching ces Mer hee diene Rie athe Jaa ee i x ES Distlosuces (Nt 1 t BSG - peldted. dis closuse: have tise swith _ aw yreness 4, __— E86. = poked cis. + Dis ate vhary = in Conga tah Gemminiations cs taal 2Us2/e gig. (orgotate pings : Sula Saas ves” hori beri ali pte Excaiie —_Renanein = Hans partenc, ef, _Gumpen alton. = Rec} oemance aitieia: fae i i Cuddle | certain and event NE = mistondulch = breach law s = link sith rnpang_—_ Shae ; ‘ ya Ove acer eg = fay detent au = Nee Toppiate of elessive ov oec Date 2073 thuesdoy U ES6 Factor Daal should of Fitmine. which, _ 56 toh naglans Gdoort te thet Vidutg @ then let all nlp 3 Peo retary Methads 2 Naalycts use their own, urgent o_fitm's methods 2 Jo gether nla siam gest _atsup”, quldhedtenatt > tooo Mepatt Dine sy ety aad envi fdmenti 2] ESG data rovidlels_¢ 2 Vetq provider sun as _ MSC Sustainalytics ¢ RepRisk. Saale. Sores quantitative analysis. 3 Non ~[or- Profi ind or4anietiy inifialives . 2 frovide ie me insige on ESp Dine £ Sace -puide slandardized £56 tolated : i Broly st \ssues I Weg” vbast 1 aL cine and, sually il focus on E36. i factor aR isKs | + Esa shots ight fender ___an equipment obsolete (i.e a. i} Shan ded asset “sue $< te value the fins Jong —Temm i bonds that Sheuld, be gust cularly Sensitive lo’ the Sx i + Equihy analy ti ansid both the the __upside ded dotnst HT ESA (ee Valuii a m vite with favor ie esm whi | f ok fit jin “i negative policies.Poge Nona Dote__ EE 4 VS __Fixed _\ncome —> Gen efally on aa ‘on «Plows (id WO opracucitttis £ downside ise a 7 ee a Initeg ratio i) — + Bsl__{ achat canbe _induded in a _itm's_valuation ue J. ua ak (aktaDioct watieus Fite elit spend ane —inome O. inshranment ay —_be tellect ES" Concomms. sty adi __to _4ise tale ociscask of Copital may used te ae "Gs Gnsidetutions non equity analy sks beneli fs + = _tnvitonmest er __ climate. > \ssuer: ‘ely mest _addifional Costs elated to the Lo ¢ | Donitoting Sepang at she use bond. proceeds By 0 ea uses US 4reenwashi« L. = = ireensnashing > Risk thst bond. _pmcetds tse ack octually used a sales beneftctal environment _ of _clim ate — rated i pinjes™ \ + aa. — al buy -and~ hold Investors -3 akample. be ‘+ Baanple LC envitonment are + Sd - dak [he in on process cads fo hy re credit spr, A she + Example 2 C social foctor) A dtu fo ith | > Teaalls & sels Guality concerns many fon cern (ecocgotating Fils —urguld lead tock - pice _€ higher Credit Spread. Ex 3 (governance issues)? A beak’ boarah e: Fouls _£ credit i orem ec ved ta bdid would be hitheei Dote_f 9 im : 3 Ng Cost Capital Soe Iiltaduction — —__tleght ava __cost of —tapikil _ClRcC) 2 ‘The cect oh dab aud i fr hat [inane @pasy Beck” ol debt“ Nec - tox" Gxt tp He det based onthe. retum, debt lovestots __feq fo jane a 1 foe of eouity § Return jvestor (eq 7b gua Ca. ae. eh J | = 7c tc ed be the @. internal ——— Sesion maters Jo: — evaluate Capital [Gast of 4 | oct of ee | debt | Eaut. 2h weclers ther is a_i i MY ofr _teluction (OAC. "Whee = Wala (Li-t) + Upp + Wel ; fix aire => _Veles minén: 2. once] jg.uslevalleniase because itv Thum erous Comel assumption & Choices 7 ste _is__n0_“‘ta\"_metedd tp _calusl ete — ong = term ar itl ___ struc rat e eS Gastent crite Sttucter _ Fe Lomi matgjool ae tole mack abe suesteBeta = LS ___ ‘Tax tiie = 307. ERP» 67. be Weight Delt = 307. nS : MEM © sxe = ex Kea = 127. X(\-t0x) = 84n WRC = to7, x e7. &) 302 XP-47 FH NG 62% * Gs af Capita) Aas ‘The __Gosts 4 debt equity Gagital are inl LA acco p22 Top-Down factors + Eytan y ii 3 Capital ilabil : ae alee 0 Aula D Legal rea censiderations 0 Market Conditions U Tox ju cidistion Compa ma 21 Bottom -up factots + Company = Specilic of iden cun crati HT D Biz of peta’ ng, Cisk. OD Asset” nolure and Niquid Y + G Seutity Features © D Financial Senet | & i l Seared debt Srmbedel cgting Puttablo gr HK Methods Used 4, Eat the Gort of adh tthe methods used depends ona number of va Nigidity 3 Yoo liquid oc _-markelle x the _debt 4, ing 2 Dees the debt have _q credit tokog | coy Gortency > \n__tohck _Gattency ig the _det__densminated r Bren Cuyery Sack 0mm yield ve \ THExamle - Grd debt "Using metre —_Priaig v & 4 + Brevis Salton isa tech ponder _for__the a tare_cedtr | + Sunil “Wilak , CFA is Acing 4o est the @sb 4 det iepsesent 258 heaves __Cayital _struckate.. ‘Te G4 eit 3g holy aded Wk oles acta, shan nev on we Similor 68 -rafe d= Seuutlies fat hav \iguih _ market's Lrg Maluity Capon fate _| Est _the sels 4) debt Emin 4 Sx $4145 | using the mati x tmethed Reso ia a 4 toh 35 q nHaalied iis = attek. ‘ln at. t &% fa wa set ou —Galaliter __fuc Liste Sih # Wess Ne? , Petey Evewo CFT Wy = 858% SS 7 n G26 7. Wye then _Gonsttuct a matrix of maturity ¢_Gupon 5.53 7: 4 v Cougar Rate ey t s Mawity | 5% 6% 4 ee : 4 08) aes = = z a ) A ti ie sue BAI Sat, |,a. use linear interpolation fo ___delermine =r bond as {eles (Hid — Yield gure ) Osher t wleted yield 2 Yield act *f ies — nial Mal a 25.337 + [(534-593)] x (6-4) (4-4) J = 533% 4 (oan x2) MT = gary. 9 Aterys potoach “bo Fst ERP a “erpurg tbe f cauhy copie Sy shema Ke R MRP (ECR this __feading _ig_on est __ ERP fat q at siting negCex post) approaches 5 the ERP. mean KL historical v Petiod mn d cattent __envifonment. ed \-Pfediod felut_o Leasiegrode Grind = ~ Keo srt eet an +A tits ti eht ssf = eu : d é ~ WENT ee meets re PLtG Aj Yield plus Rich giem build -up method Risk _abased inod el a Fe tate felun tite ot _ international aad of ¢ i tb , Somgletity cot lier i a “dare ent Shave pie R= E100 xgectel ele dv =D = €3 fxgede —Lpetpetuall_qosth _nfe_in diy == \\oily —28 5 @ Ded Vor than qui gla ” Te YIM & brane 2b Gk debt Cpraxied by NTH on 11D) u i te @ . debt Risk _pten Joc qui (elative Risk - based models > oy fenp + €5N9 + PWM + B, Rmw + 85 cmanics Stock _pflue _i os ale the sto equily be Cog eases (rene expected _div ol bo q $3 gt the end __at each fhe oat! ' Castent betagenicé oi is__ $50 & the end al ‘ade 2 For bela years ___weE SP Using FVM Keys PV= tot | N= 1S) PMD = 82 FV elo0 L Or Ih => gor L J & of equity ohn $3e7% 2 WAT es Five-Fackor Medel | BP Face Rll eet | Rive ftom | Gle the ast of _epity fo Nacket ‘A 3.27 Coopilsd Hiden 2intielaletalla eg _ Size 02 ez = Nalwe 0.3 2% * The current RR ts 247 | FosjHabiliy O18 427. _\nves!” style 05 Qht, LS! (e= 217 +(x327) + (02x \.37) La * (os x 27) Lo a + org x 427) a i ' + (05 X 2-47) :& less mature Grom balarecs often smaller dal the oe no. market___paice Es Risk Prem for a ple La include Size Prem (SP) at oer Rise Prem (1P) Wo Speifc aap isk __prem sexe) s A general Risk= prem Govetin fick ot the ‘vate Sompony ‘sah Key person __cisk cayhical” local Gikstele _Jubeh i Z . ss rs ea lon i nt 4 pr Factors Affecting Oikpiaaaa ea Factors Quantitative Fackors Pa atpora aoverance quali Waher _ dleverane . pine erlio Infanachles- nd Tce H {Inna bi dicdte higher 5k inital asses. : * foor Competitive Standing in the indusir4 e lt Tue caithest adequate skill £ experience - + eo afi Concesttation Pas. Cncentration.ot supplier con entuctisn en indicate highs et fskFt shies . 12 A the__tisk- {fee ie oo adds the ety Tike ptm E__Comy = spe lit ae ae ? Paty " 4 ey eter fost oeede ae, WaT chem ‘Gaal uses ae 4, a 4foup. st pect Companies (iduin€) [Bey Reuo = Gt Pre ER 4 St @ seep * Quashitat wl aunt depends 20 dias Piet he customer © nl sappliae —-_Lonceateatte ges a 4 mam” _ a (i v Gancenttation (amp chitive _ pusition in the Indust + Quantitative ee £__fingeviol _leveratte_,_eatnint ty vilebity _£ th didity VO ce) lati ee q 4 in. a Ke Ink Ge a shrudure 9 piney € = her a = \« emery Marleets a pie. sthese, tragKet tisk coq odditionsldeluged racket 4 CEU inet laf Bi rd a - Ca vidd CdeuLoped) (enetery) Gxiners trode 7 Coutty Rak fubing val eRe heat pa = mn cay ssk prem CGRP) ( ake al__pftm) [or a Sp if merging oo y piem hen becomes = ERP seutapeg t+ NX CRP ee Gain Rick Chen, Ne expusute 4 ae ea ee Sovereign rindi ane! “eigt') oJ dill y lenal oe envitonment ? Mt a Woah fue feconmended aie the Sovereign yield 1 — eon dein of heal i : CRP = Sovereign \iel, ead X 1 Pa tee) 3 Extended CAPM index to est the ERP cal index 3 Use y= ri ; H I / I I : | ke Y. ! 4 I f t | developed __¢ emerging \ 0d Aqsa! _ market i f unde esfinuled Overcome: tis Second doc Cepfesert the [ical marleet i Sometimes includes . i ~ Thaugh te: avolbith 4 —* Flic market index dita i an emecdin open in man, ttA ba Ma 2, A wealth -welghted : = Inlen re) = fy + Fe LE Uy) =G Mai 1 Livi 4 he market » Carey $ nde} : us fo = _Sensitivit: global Sensitivi So = foreign the index l on hdex ee BL elt) 4] ole | market inde K _telurn yceign Carreny index “return& Qwerview g alge tate often hove diver: lines of biz under a Gmmon Grp umbrell Bie or ve) laisy neraies 0° fay Sustenitbesel [rom ‘ihueses sivets¢ Indies BP erasers cxay Sl Rene pth ary) sale Tes ponse 4p a changing ie” “cabicabndeyt aot feduce snlidendes 6 of Sy ners de “Wupes q Lotoasate fonsaction + \nvect” 2 Increases biz + size’ andlor _Scop: >To increase revenues and improve ratgins + Diwestmert 2 Decteases size __orlor__Stope. rt biz = sheddin: Slow growing ew ~prdlit higher tisk Segments t vee a q . Restructuring : \nptave perfatemance with same Stop € to tisk EY ce - Qow Motivations jor lnves}” Acton © Cixating Synecaies Firms are __mofe valuable _cambined i+ Incr ewsi ‘ oy Form a tel — growing Company aren uv Va ities ©.f i Page No, Date. Hc lm plove acess ty fesources + Talent. trsnacaring de 4 “2 Sursuin dervalu wed” Relati 4a , __— Motivations ot Cofporat, Recfuti __Actio nest” isitvest” cturin i |- Realize Sureries | + fous opecations é s\mprove _teturn i “Yntease ith biz lines | —Gital Vsuerseal Improve Capabilities [+ Valuation CoveiVile) [> Fingndal dhalle tnclivations lor Secure resources + Liquid 20 indudi Keo Ongar tunity to ds Reesulaory Leg. guid ation. | acquire an _under— : valu i % Top - Do i it Resturcutrin | there are two top-down drivers al all Yhree ind orton s 3 jodusi shocks & higher sec) Plincs orefall | i I \ndust Shocks . > Corgorate _seshructuring fonds tp have indistry = specilic _Wwoves e ow! a" are alten {ellowed by erate. merge * Tis a industty shocks sae a mane motive. ae. Cecyatte G nsantele a je Wig, 5 Price a _> Potential explaination fat the economic. Atallty of ad sport tran Sackions.Goli dence = when ida S~ Qsing cdanalusdie acquisition Ina week o tel, transaction od 2 Types of Investment __ Actions \nvest” Equity, cow material on. (<0) Stake CEO See Jhen oq _cteite more value in another a @ Rucchase: The two have maintai fe preserclation One g Oitey — made foc = Establish ing a their investee. in in dependence - hoard + di ‘eclor $ several Teasons 37 —patingrship bel” firms on initial a an = Takis < = lest mn Vertuce Mol€ Gnfibutes Shave Doin of Gom panies. * Two « Fah fin at th cticd + Tedhoiclly ust a lonely Price, assel lage. fe 4 a. ov. Goon pany man) foward on evenhual de. Quisitie n we _telives tk _ undervalued form atu Segesake. Gmpany ro Krouy - Knows how em poste: the Js equi inves!” ead Callen [oteigm )_ marker v ve pide = or _lesseen a Aareet . Nequiter then Shace be gain Gothtal is 4. rit _.ot Specific assets , foc ash poe assuvnglion of \ichilities ool Xi as ea bsidariggy 4 Tegars _g a _ nel fevenue , xp = Exch _tinawial Stat” — =: ‘Divestment Actions. “tna actin such os 2 Sales + Spin hs es or Je Issuers Seek, rh | + infease growth, -. increas ve + feduce a Shedbing a divistons assets Sale (alsy, Known a5 a __divestijure) 3 Ming a Company Seqment of a assets 2 (osttel at. rhe tie ig faite ua at acquifer + caller 5 ty diveted bine Cagite\ Gn a be ara toa beter ue =O _feluineh ty shareheldess or Cleditor s Seller aquifer ao fen both faces on hein Stceny thincrease sang? Be pack, inc a = Rwardi felevant ction = Removing” —_inmpotiltiy bef” _gatent € eo + Firms ase i i tims. Securities , —_ [inascial ‘eporting li mand” ete T Motivation far _Reste ae Rectiuclusing _ach'ons , including == = Gost ResBletastng s 1 2. BS fesbruckuring Tse Reorganizations” a 5 change the _ Size of_ Scope _o|__tssuets, Ba Myce McleaeAY anus thot felutns 10d Capital to _histori cal ec __peec WW. g + Reduced (ests Ob Lg faving ope tational qc + Raise targa fo historical Wor in dw peer J Dutstandins => Sending Sp iia, Standardized, Mi processes. CU, WR ete) to i Xvid = fart, Companieswere Je another uty while : cp. a “fe. siec Combined. i the. ie ft sesh Tree Wes acs € dv leg = ach a SANE whe a, fy alesse foc Gath 4 in Signc a \ease, aa feernent fee its__use ed P on Dany Wwice by Lcfeusing debt Ahiaugh debt = fina or__share “epucdases anizations Bank uot os a.ssumni aottol insolvent Compan overseas “an _oftherl tedotiation Liz eperations ete lacinucou 08 etal with Geditots en. ¢ exits with Lighter a hea \iquidetion i ProceedsEvaluation sh a ao Res huctuting itu T+ Byoluction og r ee ee Lake can i ce el — 5 Modeling = Fingncid) Sta fk Restudlusin f j O dpdeket Yhe invest” thests 4 «Ful evaluation _ts usually reserved |_t_—-aental ¥ \nitil__ Evalustion. of Grp Restiurtusing + Whats g ols a matepial of ey + dhen sit _heppenint 1 Whe 4, tt ni hnitial _Eveluatton = Matacidit defjsed toj_bath _sze § fie fesbructuring Mater « Size % Ore tule f thumb deh ines a | actions as on shat___is Ahan, of an _Ksuer__ ett Sued er lot v 4 {oc an cp, Consideration in exceeds _of_loy- _. the enter ptise value a s ic 06a. Pr eann ounce ment “Hs Rees bs a aligment ll’ the ackton _ ening ent different industry could __be i oh } ex! 0 anal __axq_in a steate a oneBIT Gm patuble.. Go. : rie trans” al Dic oF valuction oe “ Similac, sted _@. She Avante + flasks a _ Similar __yolue to Similar Coin the Sadly avail able. be hard or impossible to __[ind mis ging (overvalued . Comparex: Comparable valuation multiples = Aransectigns —_mmdude __akeover Perm Advastages 2 H+ Nelue est _Gome__|tum_ actual ran Suction prices. + Vc unnecessary _lo__est to sepecite _takeover perm Disadvartages 5 + There on be lem cc no _ommparable _\runsactions + Nocroeco Conditions influence historic. Sqan Saction S. «There iy ag tisk thot gust __acq_ver_ or underpaid K Prem Paid _Rnalsi + Est Sareover prem _i¢ the amt be whith the _per = share Jake over pile exceeds. Yhe___unall ected pice * Expvessed _as__a_7- 4, the unaffected price + Reflects the _ price Gnttol gc the Gatra prem Foc historical Sransoghiion the pce. wale PRM= COP - ur)forma Linanctl Saf" include __eshrucluring ef F j v : 4 it i {ot nui € Credit ~ evaludtion Include > 1 Rey Net debt 4 Emit on "EPs 3 EC Measures + Pio Forma —_\ntome Stat” Modeling Creaking pleat inancigl Stuf” Coc) 3 i aq € target rev MA teu soe git [0 Sublioct [or _inompatibilt es) + Gmbine j eq and target Greratin x = Subltack Gost Su eros fara add va of, indsminatibilites)p of income acy target __ other exp or. income. ~ ~____|st_ tte ep + Sart sith Garten’ __acq_inft _exe h o ae — em dst wsuance _& _Sevised int mites 1 al ! \nome taxes ee + 8T- weighted ay ol fox giles oh _aa ¢ Jorge yor & si is \ssuets. Share Out standing * Start with ihe acq shares autstunding + MA —shutes [Jom _go4__ shave __issuance 3 Peo Forma Ace The WACK for an _tsuer_ Sd ctermined bie pa): the Wayit a diesen pital__types TB Me anita" asks” of, Gp cll [sues Wc) —___ = Y oo Lost debt Cosk of, pr Equity 1-8 sie dlecse mature movie studio 1s Concerned abot Ctodioy ite market Share. is of digital distibution co Yat provi sGrtent ys iiss sub csther Nya) __ high neds a Capital infusion {oc Gortinued fourth Oraqnic over v del 4 one dus of Comm on Shaves {iaansials 4 the 6. (atm) fallow a S\'billon Gay tnvesd” oe 286% invest” a Issuelny —— Seniyeaxeuare te [J wind ino Ev \431, Lor aaa 34 Hey ‘oa A .! Evaluate __Yhe Implied Bela the trap Suction s a sist on alpha Sclvenca + What Dther Gr porate undertaken 4 + Noha alterratively Guld have seruced a Gonttulling | gt _in_bot a (ie an. 4) 9 more ya te pues bie 22 het ce the EE ligt will obo tn eal nto __a_fosk 44 ig ioe Seqmen % ell ils again a _mnedhanism "fp _ monetize assets (1 ibs Gent Library) | ORES pienaty motivations for tho Componie s anounced, an Sackion * dhe Rewsary —afuten Gh bePage No, __ Date. 8 i Evaluate the valuition A Bola Ienglied oy oe Ata + Given ther _Npha__acq__&__257_Shake oS + billion , Reto | ipod matket capi. est gt 848 aa His (wen thet Weta has no debt, beta = Gy i ghe 4 4B Eis aap ann ee ee Ta Smee Median ~ S Mean = 5425 rls Ye eoean Pi/ey —rullgle of SS the EV af beh “would We este blidke 1aZbx, pvenotieBd / =i ia i ld bo be toxS = $3468 +The median _maltiple tay be mate ceptesentative becouce thee mean iss Skewod by (arnpatdble ©, hich appears _ be an outlier - +e : {tified __value of $368 the $48 purchase pe aa de ke at 1a prem of MN 7 Wher Abia \, tke inte accounts are __pishe £ arousth ite “| jon er mies - VagA LV «The process al chin a dV__dnnountement is sivalar + tlue —¥—cnsidbe trad J ulna a = whet ae ep gating foe two firms involved % = what __Impact A Yhe transaction ave on the _various 4h takes of the two _ Companies us + Recourtiog for a BV __ts_Similar___to Sika Wives ApS + We wo garters in. the SV. will Lepect Yheir Stake. in Yr c a i ia Shoe incom & Aheic _tesper bye > income staf” Roy Capital _ alse ey Ye two ectnes vill be acaunted Pam. their own. {ean dal stat. K Bdkaling 2nd hog Acquis tions a Covi c in kai ci Sh analysis topic area + The acq mmethed Gals fur ine “byline nso a eshan investor Linanviol _stat” sith the [inancial__ staf? tS Tia ah a. aol ian of non Lontillng i Sb + Basladiog Gin jetude detec minin Ahe ip pack 4 deg est ne ratios 28 tify ee{ronsaction __piice the pat é — erm he aeauaitl aroble —ransachton analysis, aod tn fem = pai Map dissed earlier *K Evaluating Sa Divestment Actons: invdves 4 the 4 ment i te lon he ee at Een, + On ¥ 7 oc By = to = Sales bo vdlue the _yasious _Segement”_d,_a ki fhe sum _d, the garts_shodll__equd the Conse BY, & peels (ie tach Stax) shal le acouted Fe pati oft fica slat" Fe Shen talio _Such__as debt to - GLIA Gan _be prepared the lonpack 4 the ale en the _Compaot debt _tetingy ‘i tocceds hence — Fs Unlike sales =i dent __Genesstign casier 0 model.= Que__eX pechativns = Ae likelihved of achieving. She + Kroon a enpiifon: el CF pale (devant _ echo festeuctuings geal to tat mn ‘nan dal I t