Case Synopsis A. The chairman of Citic Pacific‚ Larry Yung Chi-kin’s father Yiren Rong started the company in 1978. • Citic was started “to pioneer reform in the financial sector‚ lure foreign investment and technology to China and develop international business.” (Ko‚ 2009) • When Yung became involved with the company he began to acquire more companies. o Eventually had Citic Pacific listed as a red-chip company in the Hong Kong
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he real option approach to investment decision making The real option approach to investment decision making does not provide a superior alternative to traditional methods Capital investment decisions are among the most important strategic decisions a company can make. Twenty years ago‚ managers began to realise that the traditional capital spending decision techniques such as discounting cash flow (DCF) were based on estimated revenues and costs and hence not appropriate in an uncertain arena
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Application Questions – Assignment Option #2 DUE: November 18‚ 2014 (hard copy handed in at the start of class). This assignment consists of preparing a written response to ALL of following (4) reflective questions. IMPORTANT NOTE: No late submissions will be accepted. This assignment is to be submitted only if you did not complete Assignment Option #1. Questions: 1. How can organizations improve the quality of their interviewing so that interviews provide valid information? 2. How is a coach different from
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Student Answer: Physicians having more responsibility for filing claims Untimely claims payments that result in financial difficulty More patients using managed care All of the above Comments: 2. Question : All of the following changes were a result of managed care except Student Answer: Physicians having more responsibility for filing claims Physicians having to wait 30 days or longer for payment Patients having to pay
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Real Options in Theory and Practice Answers to Selected End-of-Chapter Exercises Graeme Guthrie This document lists the final answers to selected exercises. A full solutions manual (with answers and working for all exercises) is available for instructors who adopt the book as a textbook. Chapter 2 2.1. (a) $32 million. (b) $29 million. (c) $31 million. Chapter 3 3.1. (a) πu = 0.302‚ πd = 0.698‚ V = 9.2566. (b) A = −0.9434‚ B = 0.15‚ V = 9.2566. 3.3. V = 10.38. 3.5. βx = 1.0: K = 0.9519
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Chapter 13 Real Options and Other Topics in Capital Budgeting Learning Objectives After reading this chapter‚ the student should be able to: ◆ Explain why conventional NPV analysis may not capture a project’s impact on the firm’s opportunities. ◆ Identify five different types of real options. ◆ Explain what an abandonment/shutdown option is‚ give an example of a project that includes this type of option‚ and explain what an option value is. ◆ Explain what a decision
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FINA0065-1 Assignment #1 – Laura Martin: Real Options and the Cable Industry 1. Consider the multiples analysis developed in Exhibits 2‚5 & 6 Please describe the method of ‘Multiples’ using case numbers and answer to the following questions: 1.1. What assumptions does this analysis rely upon? 1.2. How is Martin’s regression analysis different from/similar to traditional multiples analysis? 1.3. Do you agree with her interpretation of the regression analysis? 2. Consider the DCF analysis presented
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Laura Martin: Real Options and the Cable Industry Introduction Laura Martin‚ an equity research analyst for cable stocks‚ believes that the best way to value cable stocks is through creative methods such as real options and not through more traditional or typical valuation methods such as EBITDA multiples‚ ROIC analysis and DCF analysis. In 1999 she presented at the Credit Suisse First Boston Broadband conference‚ where she wanted to portray the message that real options is a superior valuation
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Characteristics of Options r Definitions and Positions: - A Call Option gives its owner for a specified time the right to purchase an underlying good at a specified price (= exercise price or strike price) - A Put Option gives its owner for a specified time the right to sell an underlying good at a specified price (= exercise/strike price) - An American Option permits the owner to exercise (=buy/sell the underlying) at any time before or at expiration. A European Option can be exercised
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parents and students who are interested in taking up game development courses in certain schools such as De La Salle-College of Saint Benilde. His talks cover the scope of the course‚ the activities involved and the career paths‚ and the numerous options after graduating. This helps ease the worries and cures the misconceptions of the parents‚ and also helps the students build a more realistic expectation of what lies ahead. So is game development technical like computer science class or is it more
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