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On Maximizing Annualized Option Returns, Charles J. Higgins
On Maximizing Annualized Option Returns, Charles J. Higgins
Finance Faculty Works
While options do generally demonstrate an increase in prices as time increases, an annualized return of their excess premiums exhibit other characteristics including a lower return on options farther out of the money, that as the exercise price is farther out of the money that the expiration with the greatest annualized return is longer in time, and more interestingly that for underlying securities having larger standard deviations the greatest annualized option returns are found with options having shorter expirations.
An After Tax Valuation Of Debt Instruments, Charles J. Higgins
An After Tax Valuation Of Debt Instruments, Charles J. Higgins
Finance Faculty Works
The net present value of any loan at is own discount rate is shown to be zero in both pre tax and after tax worlds. This allows separation from any investment net present value analysis. Further, it simplifies the analysis and it is argued is appropriate even in weighted average cost of capital scenarios wherein the cost of capital equal to its own after tax discount rate and remains a zero in terms of its own net present value.