The Role of Contingent Claims Analysis in Corporate Finance |
Common terms and phrases
analysis application approach asset assumed assumptions becomes Black and Scholes bond boundary condition Business call option capital budgeting cash flow changes complex consortium construction Contingent Claims contracts convertible corporate liabilities cost coupon decision demonstrate depend derived described determined difference discount equation equilibrium equity estimated European evaluation example exercise price expected expiration date Expression Figure Financial Economics firm value flexibility formula future given higher important increases interest investment involving issue Journal of Financial loan guarantee maturity date Merton necessary observed operating options option pricing model owner partial differential equation payments position possible practical present price guarantee problem procedure production project value put option quantitative replication result risk risky debt says schedule Schwartz securities senior debt simple solution solve specified stock price strategy structure Table technique Theory traded valuation variance zero