Advanced Valuation Techniques – Option Pricing Models

These are used to value financial options, but also apply to complex investments like:

• Employee stock options
• Convertible securities
• Projects with uncertain outcomes (real options)

Common Models

Application Beyond Options:

• Real options analysis in corporate finance (e.g., value of waiting, expanding, or abandoning a project)
• Valuing startup equity (where outcomes are uncertain and nonlinear)
• Understanding volatility's impact on investments