Aswath Damodaran Stern School of Business 44 West Fourth Street New York, NY 10012 Abstract In recent years, practitioners and academics have made the argument that traditional discounted cash flow models do a poor job of capturing the value of the options embedded in many corporate actions. They have noted that these options need to be not only considered explicitly and valued, but also that the value of these options can be substantial. In fact, many investments and acquisitions that
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European options is likely to change the price of a call option. A derivative is a financial instrument that has a value determined by the price of something else, such as options. The crucial idea behind the derivation was to hedge perfectly the option by buying and selling the underlying asset in just the right way and consequently "eliminate risk" (Ray, 2012). The derivative asset we will be most interested in is a European call option. A call option gives the holder of the option the right
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the forward price is $50 and taking a long position in a call option with a strike price of $50? In the first case the trader is obligated to buy the asset for $50. (The trader does not have a choice.) In the second case the trader has an option to buy the asset for $50. (The trader does not have to exercise the option.) Problem 1.4. Explain carefully the difference between selling a call option and buying a put option. Selling a call option involves giving someone else the right to buy an
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________________________________ Student Name ________________________________ Student ID ________________________________ Signature ________________________________ Seat No EXAM COVER SHEET NOTE: DO NOT REMOVE this exam paper from the exam venue EXAM DETAILS Course Code: Course Description: BAFI1002 Financial Markets Total number of pages (incl. this cover sheet) 12 ALLOWABLE MATERIALS AND INSTRUCTIONS TO CANDIDATES 1. Write your full name and student number on each exam booklet together
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Many companies use employee stock options plans to compensate, retain, and attract employees. These plans are contracts between a company and its employees that give employees the right to buy a specific number of the company’s shares at a fixed price within a certain period of time. Employees who are granted stock options hope to profit by exercising their options at a higher price than when they were granted. Employee Stock Options Plans should not be confused with the term "ESOPs," or Employee
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Accounting for Stock Options http://www.nysscpa.org/printversions/cpaj/2005/805/p30.htm Print Accounting for Stock Options Update on the Continuing Conflict By Nicholas G. Apostolou and D. Larry Crumbley AUGUST 2005 - In December 2004, a decade after bending to Congressional pressure and backing away from requiring the expensing of options on financial statements, FASB issued a revised standard to recognize stock-option compensation as an expense on income statements. Many in Congress may
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Software used by Legato (CosmoCall Universe™ from CosmoCom™) 4 5. CosmoCom™ -Legato strategic Alliance 5 6. CosmoCall Universe™ Features 5 • Multi-Channel ACD with Universal Queuing (UQ) 5 Phone Calls (traditional ACD) Videophone Calls Email Web Calls (chat, voice, video, collaboration) • Interactive Voice and Video Response (IVR, IVVR) 6 • Interaction History 6 • Outbound Dialing 6 • Recording and Quality Monitoring 7 • Integration Capabilities
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1. Explain where an employee can reasonably expect to have privacy in the workplace. Let’s start off with what are some employee rights in the workplace. Employee Privacy Rights in the Workplace have brought two opposing points of view to the forefront for employers. When dealing with privacy issues in workplace situations, employers are duty bound to maintain an environment that is not hostile to workers. “The courts have passed laws concerning race, ethnicity, sexual orientation, age, gender
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January 1, 2004 Federal Reserve Bank of Cleveland Arbitrage: The Key to Pricing Options by Ed Nosal and Tan Wang A rbitrage is the act of simultaneously buying and selling assets or commodities in an attempt to exploit a profitable opportunity. Although the idea behind arbitrage is fairly simple, it is quite powerful because the ability to exploit such opportunities is needed for markets to operate efficiently. Arbitrage ensures, for example, that buyers and sellers of foreign
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personal gain not for the sake of the company. Jack would likely respond by reporting that Carla used the copier for personal use and made long distanced phone calls. That which Jack did could severely damage the company’s ability to continue being successful where Carla’s using the copying machine and making personal long distance telephone calls will not impact the company as greatly. Carla consequences would not have affected her as greatly as she believed. She should have gained more information such
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