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NYIF: Option Pricing and Applications in Capital Budgeting and Corporate Finance

Get familiarized with Option Pricing and Applications in Capital Budgeting and Corporate Finance.

Option Pricing and Applications in Capital Budgeting and Corporate Finance
4 weeks
1–2 hours per week
Progress at your own speed
Cost to Enroll
$275 USD

There is one session available:

After a course session ends, it will be archivedOpens in a new tab.
Starts Dec 1

About this course

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  • In this course, we’ll look at the elemental features of basic call and put options and identify the factors which are the key determinants of option values.

  • We’ll also look at the characteristics and methodology used to estimate option values: Black-Scholes and binomial option pricing models.

  • In this course, we’ll also define the term “real option” and draw decision trees to represent alternative decisions and potential outcomes in an uncertain economy and describe three types of real options—timing, growth, and abandonment—and explain why it is important to consider those options when evaluating projects.

  • We’ll explain how an investment for which a negative NPV is projected can have a positive NPV once any embedded real options are properly included in the evaluation as well as describe other methodologies businesses sometimes use to decide among investment projects: Equivalent Annual Benefit, Profitability Index and Hurdle Rate.

  • We’ll wrap up the course with a look at the option equivalents of corporate securities and explain how any insights obtained can be used in determining optimal investing or issuance strategies.

This course is part 4 of the New York Institute of Finance’s Corporate Finance & Valuation Methods Professional Certificate.

At a glance

  • Institution: NYIF
  • Subject: Economics & Finance
  • Level: Introductory
  • Prerequisites:

    ● Basic MS Excel skills

    ● Some familiarity with financial instruments and markets

    ● Elementary probability theory

  • Language: English
  • Video Transcript: English
  • Associated programs:
  • Associated skills: Capital Budgeting, Finance, Corporate Security, Corporate Finance, Investments, Decision Tree Learning

What you'll learn

Skip What you'll learn
  • Introduction to Option Contracts and Option Pricing
  • Real Options
  • Integrating Real Options with Net Present Value Analysis
  • Real Options Applied to Capital Budgeting Decisions
  • Option-Based Deconstruction of Corporate Securities

This course is part of Corporate Finance and Valuation Methods Professional Certificate Program

Learn more 
Expert instruction
6 skill-building courses
Progress at your own speed
5 months
1 - 2 hours per week

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