Capital budgeting
Investorline Capital budgeting (or investment appraisal) is the planning process used to determine whether an organisation’s long term investments such as new machinery, replacement machinery, new plants, new products, and research…
Motives behind Mergers & Acquisitions (M&A)
The dominant rationale used to explain M&A activity is that acquiring firms seek improved financial performance. The following motives are considered to improve financial performance: Economy of scale: This refers…
Method of financing for Merger & Acquisitions
There are some elements to think about when choosing the form of payment. When submitting an offer, the acquiring firm should consider other potential bidders and think strategically. The form…
Mergers and acquisitions
Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities…
FIFO and LIFO accounting
FIFO and LIFO Methods are accounting techniques used in managing inventory and financial matters involving the amount of money a company has tied up within inventory of produced goods, raw…
Comparison of Cash Method and Accrual Method of accounting
The two primary accounting methods of the cash and the accruals basis (the difference being primarily one of timing) are used to calculate US public debt, as well as taxable…
Analytic techniques of Options
Binomial tree pricing model Closely following the derivation of Black and Scholes, John Cox, Stephen Ross and Mark Rubinstein developed the original version of the binomial options pricing model. It…
Valuation models
The value of an option can be estimated using a variety of quantitative techniques based on the concept of risk neutral pricing and using stochastic calculus. The most basic model…
Types of Options
The Options can be classified into following types: Exchange-traded options Exchange-traded options (also called "listed options") are a class of exchange-traded derivatives. Exchange traded options have standardized contracts, and are…
Option valuation
The theoretical value of an option is evaluated according to any of several mathematical models. These models, which are developed by quantitative analysts, attempt to predict how the value of…