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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Did the 1920’s Roar? The 1920’s were an interesting time in history, soldiers were returning home from war and people had a reason to celebrate and thus the decade roared. Many women went back to working out of the home but women became more liberated after experiencing independence of working during the war. Women wanted to work, dress more modern, get educated and have the right to vote. Families reunited and enjoyed sitting around the living room listening to new inventions like the radio
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and also reductions in its 40,000-strong workforce, in addition to the 2,500 recent job losses at the company. But it didn’t went well. In December 2009, a strike ballot was held by Unite the Union among its British Airways members concerned about job losses, a pay freeze and changes to the work practices of cabin crew. The proposed strikes were supported by Unite members. The second ballot was held in February 2010, and a series of industrial actions by Unite against BA followed in March 2010.
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exclusive to a specific type of worker. Labor unions are broken up into two main types: craft unions and industrial unions. Craft unions focus on workers within a specific occupation. On the other hand Industrial unions seem to be centered on workers in a certain industry, without a concern of a specific occupation. Craft unions derived from guilds of medieval Europe. They typically were blacksmith’s or bakers. Apprentices picked up their knowledge of the trade from masters. Industrial unions tend
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- Vishal Prabhakar - Jayaraj Somarajan - Ajay Gnanashekaran - Shafrin Maredia Table of Contents Sl.No 1. 2. 3. 4. 5. 6. 7. 10. 11. Contents Evolution of Project Boeing 7E7 Empirical Data 7E7 Project NPV –DCF Analysis WACC Calculation Payback Period Stock Options @ Risk Analysis Conclusion References Page 1 4 5 7 11 12 22 23 24
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profiles we incorporated into our portfolio. As you may remember, a long call is gives an investor the right to sell their stock for the strike price. Buying a call turned out to be our best trade so far in the game. We purchased Exxon mobile with a strike price of $65, meaning that our option would not start to payoff until the stock price rose above this strike price as indicated in the graph. But remember, the profit of our option would be below the blue line by the amount that we paid for the
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|costs, stiff competition | | | |6 December, 2009 |BA reduced the number of cabin crew on |Overworked staff which result in unhappiness and |Strike | | |long-haul flights from 15 to 14 and |reduced morale | | | |announces 1,700 cabin crew
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these stocks soared in price after their initial public offering, which allowed Enron to report very large gains on its income statement.1 However, the stocks could not be sold and the gains realized in cash because the investments were subject to lock-up agreements.2 Enron’s Chief Financial Officer (CFO) and others realized it was likely these investments would experience significant drops in value before they could be sold, but the investments could not be hedged commercially. Therefore, the CFO designed
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businesses, dealing with his employees wasn’t as easy. Labor unions were growing and reaching factories all around America working towards earning fair working conditions for employees. An employee strike at one of Carnegie’s factories led to the company hiring 300 armed guards to put a stop to the protest. This strike ended in the death of three factory workers followed by state troopers being sent to the factory to restore
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$5000+(5000x3.8%). Obviously it is worth than stock option. Q3: The options do not vest until the fifth year and the strike price is $35. What is the price of the 5-year option? If Jameson chose stock options, she would hold European 3000 call options (early exercise is impossible) on stocks without dividends which give her the right to buy Telstar stocks at the strike price $35 per share in the 5th year from the date she joins Telstar. The option price is $2.65. Total value of 3000 call options
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