Slide 1 Aswath Damodaran1 Option Pricing Theory and Real Option Applications Aswath Damodaran Slide 2 2 What is an option? An option provides the holder with the right to…
Slide 1 1 16 Option Valuation Slide 2 16-2 What is an Option Worth? At expiration, an option is worth its intrinsic value. Before expiration, put-call parity allows us to…