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Extending The Arnold-Eisemann Algorithm For Pro Forma Circularity With A Specific Mix Of New Debt And New Equity, Tom Arnold
Finance Faculty Publications
Arnold and Eisemann (2008) developed an algorithm that calculates the value of long-term debt when long-term debt is considered the "plug" or "slack" term within a pro forma analysis. In this paper, the algorithm is presented in a slightly different form and adjusted for the use of a target mix of new debt and new stock.
Intuitive Black-Scholes Option Pricing With A Simple Table, Tom Arnold, Terry D. Nixon, Richard L. Shockley Jr.
Intuitive Black-Scholes Option Pricing With A Simple Table, Tom Arnold, Terry D. Nixon, Richard L. Shockley Jr.
Finance Faculty Publications
The Black-Scholes option pricing model (1973) can be intimidating for the novice. By rearranging and combining some of the variables, one can reduce the number of parameters in the valuation problem from five to two: 1) the option's moneyness ratio and 2) its time-adjusted volatility. This allows the computationally complex Black-Scholes formula to be collapsed into an easy-to-use table similar to those in some popular textbooks. The tabular approach provides an excellent tool for building intuition about the comparative statics in the Black-Scholes equation. Further, the pricing table can be used to price options on dividend-paying stocks, commodities, foreign exchange …