Valuing Securities in a Complex Capital Structure

Amir Alerasoul | Dwight Grant

valuation insightsThis white paper explores innovative approaches for allocating equity value among multiple security classes in complex capital structures. The authors review six variations of the Option Pricing Model (OPM) to address common valuation challenges, including the tendency of standard OPM to overvalue fixed income features and undervalue common stock. Learn how these alternatives treat volatility estimation, credit spreads, and valuation inconsistencies.


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