• The Korean Journal of Financial Management
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• v.1 no.1
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• pp.133-149
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• 1985

The theory of option pricing has undergone rapid advances in recent years. Simultaneously, organized option markets have developed in the United States and Europe. The closed form solution for pricing options has only recently been developed, but its potential for application to problems in finance is tremendous. Almost all financial assets are really contingent claims. Especially, Black and Scholes(1973) suggest that the equity in a levered firm can be thought of as a call option. When shareholders issue bonds, it is equivalent to selling the assets of the firm to the bond holders in return for cash (the proceeds of the bond issues) and a call option. This paper takes the insight provided by Black and Scholes and shows how it may be applied to many of the traditional issues in corporate finance such as dividend policy, acquisitions and divestitures and capital structure. In this paper a combined capital asset pricing model (CAPM) and option pricing model (OPM) is considered and then applied to the derivation of equity value and its systematic risk. Essentially, this paper is an attempt to gain a clearer focus theoretically on the question of corporate stock risk and how the OPM adds to its understanding.

• The Mathematical Education
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• v.50 no.3
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• pp.309-327
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• 2011

In this paper, we extended the division algorithm for the integers to the finite decimals. Though the remainder for the finite decimals is able to be defined as various ways, the remainder could be defined as 'the remained amount' which is the result of the division and as "the remainder" only if 'the remained amount' is decided uniquely by certain conditions. From the definition of "the remainder" for the finite decimal, it could be inferred that 'the division by equal part' and 'the division into equal parts' are proper for the division of the finite decimal concerned with the definition of "the remainder". The finite decimal, based on the unit of measure, seemed to make it possible for us to think "the remainder" both ways: 1" in the division by equal part when the quotient is the discrete amount, and 2" in the division into equal parts when the quotient is not only the discrete amount but also the continuous amount. In this division context, it could be said that the remainder for finite decimal must have the meaning of the justice and the completeness as well. The theorem of the division algorithm for the finite decimal could be accomplished, based on both the unit of measure of "the remainder", and those of the divisor and the dividend. In this paper, the meaning of the division algorithm for the finite decimal was investigated, it is concluded that this theory make it easy to find the remainder in the usual unit as well as in the unusual unit of measure.