Interest rate changes influence the broader economy and financial markets and play a central role in option valuation. In models like Black-Scholes, the risk-free rate affects the present value of an ...

It is essential for board members, executive officers, CFOs, auditors and private equity investors to comprehend option-pricing models used to determine the per-share values of common and preferred ...

Option pricing and stochastic control methods constitute a vital intersection of quantitative finance and applied mathematics, offering robust frameworks for evaluating derivative securities and ...

IMGCAP(1)]Last August, the American Institute of CPAs released an exposure draft of its updated guidance on the Valuation of Privately Held Company Equity Securities Issued as Compensation. Processing ...

If we look back over the history of modern financial markets, one of the most influential developments was the Black-Scholes option pricing formula. However, there are a number of misconceptions ...

Option pricing can be complicated, as it depends on several key factors. Here, we unpack the two key principles of how options’ premiums are derived. Learn how options are evaluated and what affects ...

What Is Option Pricing Theory? Option pricing theory estimates the value of an options contract by assessing the likelihood that the contract will be "in the money" at expiration. Market participants, ...

Executives at both public and private companies commonly receive performance-based incentives. The objective is to link compensation closely to a firm's financial results. These performance-based ...