33. Which of the following is the correct calculation of the
premium over conversion value?
a. market price minus par
value
b. market price minus conversion
ratio
c. market price minus
conversion value
d. market price minus stock
price
35. A bond has a par value of $1,000, a market value of $900, a
conversion price of $45, and an associated stock price of
$40. The premium over conversion value is
a. $0.
b. $5.00.
c. $11.11.
d. $100.00.
What factors may contribute to the difference between the listed
premium and the calculated premiums? (i.e. What are all the factors
that cause the"last price" for a call option on Yahoo! Finance to
be different from the call premium calculated using the Black
Scholes Model formula)
Question 2.
What is difference between Present Value and the future value of
an asset?
What is meant by the opportunity cost of an item or activity?
Give an example.
What is the maximum amount you would pay for an asset that
generates an income of $ 5,000 at the end of each of the two years
when the opportunity cost of using funds is 10 percent?
What is the difference between discounted present value and net
present value?
What is the NPV of the following cash flows, assuming a 6%
discount rate?
Initial investment – year 0:
$(1,000,000)
Year 1 cash flows: $100,000
Year 2 cash flows: $100,000
Year 3 cash flows: $100,000
Year 4 -sale: $1,200,000
What is the difference between production of surplus value and
realization of surplus value? Use the process of accumulation to
help demonstrate your answer.
a) What is the difference between a company’s internal value
chain and the industry value chain? What is the relationship
between vertical integration and the industry value chain?
b) What value creation activities should a company outsource to
independent suppliers? What are the risks involved in outsourcing
these activities?