Valuing Equity as an Option
![Valuing Equity as an Option - Templarket - Business Templates Marketplace]()
![Valuing Equity as an Option - Templarket - Business Templates Marketplace]()
This program calculates the value of equity as a call option on the value of the underlying firm.
The user has to input the following variables
1. Current value of the underlying firm (or its assets).
2. Variance in the ln(value) of the underlying firm.
3. Face Value of the outstanding debt.
4. Riskless interest rate that corresponds to average duration of debt.
5. Face-value weighted duration of the debt outstanding of the firm.
6. Expected dividend yield on the stock of the firm.
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)
The user has to input the following variables
1. Current value of the underlying firm (or its assets).
2. Variance in the ln(value) of the underlying firm.
3. Face Value of the outstanding debt.
4. Riskless interest rate that corresponds to average duration of debt.
5. Face-value weighted duration of the debt outstanding of the firm.
6. Expected dividend yield on the stock of the firm.
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)
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