Corporate finance course

The value of options
The value of an option increases with both the variability of the share, the time to maturity and with the interest rate. (An option is like a free loan, because you are not obliged to pay the exercise price until you decide to exercise the option. Therefore the value of an option increases with the interest rate). It decreases with a higher exercise price.
It is very difficult to find the value of an option. Black and Scholes did it (for European options) and it is a complicated formula.
example:
Banque Nationale de Paris
Call 1998 december 340 41
Call 1998 december 380 18,6
Put 1998 december 280 5
Put 1998 december 320 18,6

Parallels with physical investments >>

Corporate finance

PART ONE: CAPITAL EXPENDITURE
The present value
Investment decisions
Practical problems in capital budgeting
Firms evaluation

PART TWO. BASICS OF FINANCE
The financial markets
Options
The market efficiency
Risk
Mergers, Acquisitions, and Corporate Control
International Financial Management

PART THREE FINANCING DECISIONS
Corporate financing
Dividend policy and capital structure

PART FOUR FINANCIAL MANAGEMENT
Financial planning
Short-term financial management

Course created and updated by Dr David Chelly, PhD in Management sciences from the University of Tours.