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Pricing corporate securities as contingent claims

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An examination of the relative value of securities in a corporation's capital structure, using the concept of contingent value analysis.In 1973, Fischer Black, Myron Scholes, and Robert Merton pointed out that securities issued by a corporation can be priced as claims whose values are contingent on the value of the enterprise as a whole. The notion of treating corporate securities as contingent claims is intrinsically important, but it is also important because it integrates a variety of otherwise loosely related topics, including equity risk, credit risk, seniority and subordination, early redemption of callable debt, and conversion of convertible debt.Bringing together developments from the past thirty years in contingent valuation, this book examines the relative value of securities in a corporation's capital structure, including debt of different priorities, convertible debt, common stock, and warrants. The book emphasizes the importance of accounting for the institutional characteristics of default, bankruptcy, and voluntary recapitalization of a financially distressed firm, as well as the exercise of managerial discretion in calling debt for early redemption, servicing debt, paying dividends to common shareholders, and undertaking strategic actions such as leveraged recapitalizations and spin-offs.OCLC-licensed vendor bibliographic record.

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Detail Information

Series Title

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Call Number

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Publisher

Cambridge, Mass. : : MIT Press,., 2001.

Collation

1 online resource (xii, 415 pages) :illustrations

Language

English

ISBN/ISSN

9780262273480

Classification

NONE

Content Type

text

Media Type

computer

Carrier Type

online resource

Edition

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Subject(s)

Securities
Investment analysis

Specific Detail Info

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Statement of Responsibility

Kenneth D. Garbade.

Other Information

Cataloger

Kholif Basri

Source

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Validator

Kholif Basri

Digital Object Identifier (DOI)

https://doi.org/10.7551/mitpress/5532.001.0001

Journal Volume

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Journal Issue

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Subtitle

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Parallel Title

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