development of Antamina mine a real option? Compare it to a financial option. The Antamina mine case can be modeled as a real option. An option in financial terms is the right to buy/sell something‚ it is not mandatory to buy/sell‚ is a choice that the owner can do. If you can earn with the exercise of the option‚ you use your right‚ but if it is not the case you simply do not utilize it. In this way the return derived from an option is asymmetric. In real term an option is defined as the flexibility
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Contents Chapt~ 1 ExJ>ected Utilicy and Risk Aversion ..............................................................................• ! Chapt€11" 2 Mean-Varian.ce Analysis ................................................................................................ 6 Chapter 3 CAPM‚ Atbitmge‚ and Linear Factor Models .............................................................. 12 Chapter 4 Consumption-Savings Decisions and State Pricing............................................
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Laura Martin: Real Options and the Cable Industry Group 13 Adarsh N (60) Gaurav Chand (82) Hemant Kumar (83) Prateek Gupta (99) Rohan Gupta (104) Sahil Jindal (105) Individual Contribution: 16.67% for all group members Strategic Financial Management Prof. K . Sudershan Ques 1. What is the role of Laura Martin? Consider the multiples analysis developed in Exhibits 2‚ 5 & 6. What assumptions does this analysis rely upon? Role: Laura Martin is a sell-side equity analyst at
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uses scenario analysis which are not projections‚ predictions‚ or preferences; rather‚ they are coherent and credible alternative stories about the future. These scenarios will enable managers to (1) help identify options in the future‚ (2) help time the decision to exercise the real option and (3) can provide an important input in the process of evaluating it. Scenario planning differs fundamentally from forecasting in that it accepts uncertainty‚ tries to understand it‚ and makes it part of the reasoning
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pay‚ but that neither approach is fully consistent with the available evidence. We briefly discuss promising directions for future research. Key Words Executive compensation‚ managerial incentives‚ incentive compensation‚ equity compensation‚ option compensation‚ corporate governance Electronic copy available at: http://ssrn.com/abstract=1582232 1. Introduction Executive compensation is a complex and contentious subject. The high level of CEO pay in the United States has spurred an intense
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1994 to 2002. Negative press coverage is more strongly related to excess annual pay than to raw annual pay‚ suggesting a sophisticated approach by the media in selecting CEOs to cover. However‚ negative coverage is also greater for CEOs with more option exercises‚ suggesting the press engages in some degree of ‘‘sensationalism.’’ We find little evidence that firms respond to negative press coverage by decreasing excess CEO compensation or increasing CEO turnover. r 2007 Elsevier B.V. All rights
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Multiples versus DCF analysis Multiples analysis is simple to understand and apply. The inputs for the multiple arepublicly available‚ though are vulnerable to accounting manipulation. Also‚ it isdifficult to obtain a truly comparable large sample of firms. Multiples analysis isbackward-looking‚ reliant on historical/current data to obtain multiples. It reflectsrelative value rather than the intrinsic value which DCF valuation produces.DCF analysis generates an intrinsic value as it relies on data
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Chapter 1 Using Operations To Compete Course Introduction 1. What is Operations Management (OM) and why do we study it? 2. What is the primary goal of this textbook? A. Operations and Supply Management Across the Organization 1. Define Process: 2. Define OM in terms of one of several functions within an organization: 3. Define Supply Chain Management B. A Process View 1. Describe how processes work 2. What are nested processes
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• What is credit default swap (CDS)? What is a credit derivative index? Credit Default Swap: It is an OTC Credit Derivative. (Provides protection against specific credit events) [pic] ▪ [pic] [pic] Total return swap: (provides protection against loss of value irrespective of cause). Two parties enter an agreement whereby they swap periodic payment over the specified life of the agreement. One party makes payments based upon the total return—coupons
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forward 1.3 The one-step binary model 1.4 A ternary model 1.5 A characterisation of no arbitrage 1.6 The risk-neutral probability measure Exercises Binomial trees and discrete parameter martingales Summary 2.1 The multiperiod binary model 2.2 American options 2.3 Discrete parameter martingales and Markov processes 2.4 Some important martingale theorems 2.5 The Binomial Representation Theorem 2.6 Overture to continuous models Exercises Brownian motion Summary 3.1 Definition of the process 3.2 L´ vy’s construction
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