Project finance put option 66


Project finance put option 66


Harvey WWWFinance Project EvaluationCopyright 1995 by Campbell R.Harvey. All rights reserved. No part of this lecture may be reproducedwithout the permission of the author.1. IntroductionWe have assumed that the firmselects positive net present value projects. Our project finance put option 66 waswith the financing of the investment projects in terms ofthe capital structure of the firm and the allocation ofcash flows via the dividend decision. In this lecture,we examine in some detail what goes into the decisionto accept an investment project.

We will apply the techniqueof net present value and develop some rules known ascapital budgeting.There are four basic rules for calculating net cash flows. In general, WWWFinance - Option ContractsWWWFinance TM Global Financial Management Option ContractsCopyright 1997 by Campbell R. Harvey and Stephen Gray.All rights reserved. No part of this lecture may be reproduced withoutthe permission of the authors.Latest Revision: February 1, 19975.0 OverviewThis class provides an overview of option contracts.

As withforwards and futures, options belong to the class of securities known asderivatives since their value is derived from the value of someother security. The price of a stock option, for example, depends on theprice of the underlying stock and puut price prroject a foreign currency optiondepends on the price of the underlying currency.

Options trade both onexchanges (where contracts are standardized) and over-the-counter (wherethe contract specification can be customized).




Finance put 66 project option

Project finance put option 66

Finance put 66 project option



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