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Case
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Reference no. UVA-F-0682
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1986
Version: 3 January 2022
Revision date: 17-Jan-2022
Length: 15 pages
Data source: Published sources
Topics: Financial policy; Investment banking; Option pricing; Security analysis; Valuation; Warrants; Black-Scholes; Chrysler; Government relations; Bankruptcy & turnaround management; Corporate finance; Financial institutions; Financial options & derivatives
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Abstract

This case is a vehicle for discussing the theory and practice of option pricing. The three opportunities for option-pricing analysis are: (1) valuation of the warrants proposed as an equity kicker to the government's loan guarantee as of May 1980; (2) evaluation of the economic fairness of the loan guarantee itself; and (3) valuation of the warrants again in September 1983.
Location:
Detroit, MI
Industries:
Automobile; Automotive
Size:
Large
Other setting(s):
1983
Teaching note
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Reference no. UVA-F-0682TN
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1986
Version: 3 January 2022
Revision date: 17-Jan-2022
Length: 7 pages
Data source: Published sources
View full details
Supplementary software
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Reference no. UVA-F-0682X
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1986
Version: 3 January 2022
Format: .xls
Data source: Published sources
Topics: Financial policy; Investment banking; Option pricing; Security analysis; Valuation; Warrants; Black-Scholes; Chrysler; Government relations; Bankruptcy & turnaround management; Corporate finance; Financial institutions; Financial options & derivatives
View full details

About

Abstract

This case is a vehicle for discussing the theory and practice of option pricing. The three opportunities for option-pricing analysis are: (1) valuation of the warrants proposed as an equity kicker to the government's loan guarantee as of May 1980; (2) evaluation of the economic fairness of the loan guarantee itself; and (3) valuation of the warrants again in September 1983.

Settings

Location:
Detroit, MI
Industries:
Automobile; Automotive
Size:
Large
Other setting(s):
1983

Related

Teaching note
-
Reference no. UVA-F-0682TN
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1986
Version: 3 January 2022
Revision date: 17-Jan-2022
Length: 7 pages
Data source: Published sources
View full details
Supplementary software
-
Reference no. UVA-F-0682X
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1986
Version: 3 January 2022
Format: .xls
Data source: Published sources
Topics: Financial policy; Investment banking; Option pricing; Security analysis; Valuation; Warrants; Black-Scholes; Chrysler; Government relations; Bankruptcy & turnaround management; Corporate finance; Financial institutions; Financial options & derivatives
View full details