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General Motors: Valuation of Class E Con...

Eades, Kenneth M.,...

Case

General Motors: Valuation of Class E Contingent Notes

Eades, Kenneth M.; Hinckley, Anne L.

F-0930 | Published March 29, 1991 | 11 pages Case

Collection: Darden School of Business

Product Details

As the maturity date for General Motors' Class E contingent notes approaches, the GM treasury staff must estimate the potential impact of the liability on corporate cash flows. The student is asked to value the contingent notes and express the value in terms of the cash flows GM might have to pay. The primary objective of the case is for students to draw the parallel between the determinants of value for exchange-traded options and for such nontraded options as the contingent notes. A student worksheet file is available for use with this case.

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