Exam 14: Security Structures and Determining Enterprise Values

Which of the following is an example of a put option which is in the money?

Which of the following is not an input to the Black and Scholes model?

The right for existing owners to maintain their ownership share by purchasing sufficient shares to keep their percentage share of the firm is called:

The Black and Scholes model requires the stock price as an input.

Which of the following have the least senior claim on a venture's asset?

An option is a right to buy or sell additional shares of stock.

The enterprise method of valuation can be executed with either an after-tax or before-tax weighted cost of capital as long as the rate is applied to the appropriate enterprise cash flows.

The right to sell a specified asset at a specified price up until a specified date is called:

The Black and Scholes model is intended to be used to value

The unadjusted Black and Scholes model is a model for determining the value of a warrant to buy a new share.

The value of a warrant can be directly derived from the value of a call option.

If a call option can be bought for $12 and the stock's market value is $12,it's said to be "at the money".

A call option is the obligation to purchase a specific asset at a pre-determined price.

Generally speaking,warrants are call options that allow the holder to purchase what type of security at a specific price?

An option that can be exercised only at a specific set of dates is called a:

A European-Style Option may only be exercised on a specific date.

Options generally have no effect on the value of a venture capital investment.

To calculate the enterprise valuation cash flow,one begins with which of the following items from the income statement?

An option that can be exercised at any time until its expiration is called a:

Preferred stock is the equity claim senior to common stock providing preference on dividends but not liquidation proceeds.