Index I-15
bre44380_idx_I1-I24 15 09/30/15 01:56 PM
Osobov, I., 411n
Out-of-the-money options, 576
Overconfidence bias, 251n, 340–341
Overhead, in net present value analysis, 137
Over-the-counter (OTC) market, 77,
367–368, 563
Owens Corning, 561–562, 562n
Ownership and control. See also Agency
theory; Board of directors; Corporate
governance
of conglomerates, 878–880
dual-class equity in, 361–362, 878
family, 877–878, 879
in France, 875
in Germany, 873–875
in Japan, 872–873
of leased assets, 661
pyramids in, 878
risk and short-termism and, 880–881
separation of ownership and control, 6,
12–13, 830–831, 871–880
transparency and, 882–883P
Pacific Gas & Electric, 640, 858
Pakistan State Oil Company, 649
Palepu, Krishna G., 413–414, 413n, 414 n, 752,
837, 837n, 882 n, 885
Palm, 850
Panchapegesan, V., 861n
Panunzi, F., 883n
Paramount, 834
Parkinson, K., 779
Parmalat, 882
Parrino, R., 865
Partch, M. M., 415n
Participation, 639n
Partnerships, 6, 362
Passive investing, 180
Pass-through certificates, 623n
Pastor, L., 392n
Patel, J., 320, 320n
Paulson, John, 11, 11n, 343 n
Payback period, 107, 109–111
applying, 109–110, 119
determining, 109 –110
d iscou nte d payback , 110 –111
payback rule and, 109–110
Payback rule, 109–110
Pay for performance, monitoring, 310–311
Pay-in-kind (PIK) bonds, 635
Payment mechanism, 372
Payout policy, 410–430
capital structure and, tax-free economy,
437– 442
controversy concerning, 416–421,
893–894
in corporate governance, 427– 429
efficient-market hypothesis and, 416–421
facts concerning, 411–413
i n for mat ion ef fe ct , 413 – 415
leftist position, 422–426
life cycle of the firm and, 426–429
method of paying dividends, 412
Modigliani-Miller approach to,
416– 421, 426Omidyar, Pierre, 392
Omnicom Group, 813
ONGC, 851
Open account, 791
Open-end mutual funds, 78n, 369
Operating cycle, 765, 766
Operating expenses, 108–109
Operating leases, 657–659
defined, 653
example, 657–658
lease-or-buy decision and, 659
Operating leverage, 257–258
asset beta and, 230–232
break-even points and, 257–258
defined, 258
Operating profit margin, 743
Opler, Tim, 761, 761n
Opportunity cost of capital. See also Discount
rate
calculating, 22–23
company, 221–242, 443
defined, 10
discount rates for international
projects, 235
example, 26
financing decisions and, 329
historical evidence to evaluate, 165–168
for international investments, 722–723
multiple, 118
nature of, 10, 91
net present value and, 107–108, 136–137
payback period and, 107, 109–111
perfect pitch and, 223–224
project, 222–242
use of capital and, 222–223, 224–225
Optimization models, 772
Option(s), 525–541. See also Convertible
bonds; Option pricing models; Real
options; Stock options; Warrants
in disguise, 525
investment, 263–264, 279–282, 288–294
reducing risk with, 678
spotting, 534 –535
strategies for using, 530–535
types, 564–566. See also specific types of
options
Option ARM loans, 374n
Option delta, 549, 551, 551n, 554
Option equivalents, 548–551
Option pricing models, 536–541, 547–567
binomial method, 552–557, 578–579
Black-Scholes, 547, 557–564, 574–576,
587–588, 589, 889
call options, 548–551, 558–560
dividends in, 565–566
government financial guarantees, 607
option values at a glance, 564–566
risk and, 540–541, 549–551, 613–614
simple option-valuation model, 548–552,
590–591
stock value and, 536–541
types of options, 564–566
Option theory, 889
Option valuation. See Option pricing models
Oracle Corporation, 309, 561, 561n, 832–835
Original issue discount bonds, 620n
Osaka Securities Exchange (OSE), 682
Oshkosh, 306New issues
alternative issue procedures, 392–394
auctions, 393–394
costs of, 388–389
efficient-market hypothesis and, 328–339
hot new-issue periods, 392
primary market, 77, 367–368. See also
Initial public offerings (IPOs)
secondary market, 77, 394–399
New Jersey Resources Corp., 87
Newmont Mining, 174, 175, 175 –176, 181,
181–182, 196, 196, 197, 200, 200
New projects. See also Capital budgeting;
Capital rationing and entries beginning
with “Project”
incidental effects of, 135–136
New securities, 893
New York Mercantile Exchange (NYMEX),
680, 680n, 681, 683
New York Stock Exchange (NYSE), 77, 77n,
310 –311, 362
Ng, C. K., 791n
Nikkei 225 Index, 339
Nimmo, R., 615
Nippon Telegraph and Telephone (NTT),
816, 852
NiSource Inc., 87
Nocco, B. W., 698
Nominal cash flows, 521–523
Nominal rates of interest, 61–63
inflation and, 63–64
real interest rates versus, 61– 63, 715–717
Nominal returns, real returns versus, 712–713
Nomura, 305, 371
Nondiversifiable risk. See Market risk
Non-negotiable time deposits, 803
Norfolk Southern, 80, 227
Norli, Ø., 400
Northern Rock, 852n
Northwest Natural Gas Co., 86–87, 87
Notes
defined, 621
floating rate, 620
medium-term (MTNs), 618, 641, 803, 804
Treasury, 48–50
valuation. See Bond valuation
Notional principal, 687–688
Notional value, 687
Novartis, 80, 413, 719, 719
N P V. See Net present value (NPV)
NTT (Nippon Telephone and Telegraph), 816,
852
NYSE Euronext, 77, 77n
NYSE Euronext LIFFE, 680n
O
OATs (Obligations Assimilables du Trésor),
47– 48
Obama, Barack, 68, 308, 347
O’Brien, T. J., 723n
Ofek, E., 339n, 857 n
Ofer, A. R., 414n
Off-balance-sheet liabilities, 590, 656–657,
892–893
Offering price, 388–389
O’Hara, M., 385n