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Name - Johan Robert Galvan Villa Grupo - 212032 - 61
Name - Johan Robert Galvan Villa Grupo - 212032 - 61
Answer the question: How can companies create value from their
innovation, applying the method according to the selected method
previously?
The Black Scholes Formula was an innovation since in a way empirically the value of the
company is seen as a purchase option on the assets Of the same; in such a way that if on the
due date of the debt the value of the company assets is greater than debt, shareholders
exercise their option; for him On the contrary, if at the maturity of the debt the value of the
assets of the company is less than the debt, the shareholders do not exercise their purchase
option and thus allow that the creditors stay with the company. For many the development of
Black and Scholes is one of the most important reasons for the growth of finance in the
last years; This analysis is fundamentally mathematical, but framed in the financial profit
through options and business valuation concepts.