RISK-ADJUSTED VALUATION: OPTIONS PRICING APPLICATIONS TO CORPORATE FINANCE

Prerequisite: FN 521 or FN 551. Standard Corporate Finance valuation techniques rely heavily on the Discounted Cash Flow method. Most firm valuation methodologies do not incorporate uncertainly and risk organically and require extra steps to compensate for this shortcoming. This course aims to incorporate option pricing models to include pricing in risk into different valuation techniques. In doing so, the course aims to provide the student with a robust yet efficient way to solve valuation problems while weighing the appropriate risk-return trade-off inherent in each situation. The course will provide an introduction to the world of Investment Banking, Hedge Funds, and Private Equity. These are areas of finance that are typically only touched upon in our regular course offerings, this Current Issues course will entail a more detailed study of a very exciting and topical area of finance. More specifically, we will investigate the activities and structure of the activity known as Investment Banking, Hedge Funds, and Private Equity Funds.