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The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition
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The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition

by Aswath Damodaran
July 2009
Intermediate to advanced
600 pages
19h 50m
English
Pearson
Content preview from The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses, Second Edition

Appendix 5.1: Basics of Options and Option Pricing

An option provides the holder with the right to buy or sell a specified quantity of an underlying asset at a fixed price (called a strike price or an exercise price) at or before the expiration date of the option. Because it is a right and not an obligation, the holder can choose not to exercise the right and allow the option to expire. There are two types of options—call options and put options.

Option Payoffs

A call option gives the option buyer the right to buy the underlying asset at a fixed price, called the strike or the exercise price, at any time prior to the expiration date of the option: The buyer pays a price for this right. If at expiration the value of the asset is less than the ...

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Publisher Resources

ISBN: 9780137036585Purchase book