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Cited by 29,074Stochastic processes and financial applicationsCorporate Finance and GovernanceFinancial Reporting and Valuation Research

The DOI matches its Crossref record; 15 of the 16 references it cites were found in a registry or an index.

The Pricing of Options and Corporate Liabilities

Black, Fischer, Scholes, Myron·1973·Journal of Political Economy
DOI 10.1086/260062
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Abstract

If options are correctly priced in the market, it should not be possible to make sure profits by creating portfolios of long and short positions in options and their underlying stocks. Using this principle, a theoretical valuation formula for options is derived. Since almost all corporate liabilities can be viewed as combinations of options, the formula and the analysis that led to it are also applicable to corporate liabilities such as common stock, corporate bonds, and warrants. In particular, the formula can be used to derive the discount that should be applied to a corporate bond because of the possibility of default.

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Crossref · 10.1086/260062

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15 of 15 references verified0 citation errors · 0 not checkable

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Metadata

Authors
Black, F., & Scholes, M.
Venue
Journal of Political Economy
Publisher
University of Chicago Press
Published
1973-05
Volume
81
Issue
3
Pages
637-654
ISSN
  • 0022-3808 (ISSN-L)
  • 1537-534X
DOI
10.1086/260062
OpenAlex
W2077791698
Cited by
29,074
References
16
Citations by year
2026: 616 · 2025: 918 · 2024: 879 · 2023: 844 · 2022: 836 · 2021: 1015 · 2020: 1006 · 2019: 1099 · 2018: 1045 · 2017: 1068 · 2016: 1175 · 2015: 1174 · 2014: 1340 · 2013: 1260 · 2012: 1372
FWCI
66.59
Type
journal article
Language
en
Open access
closed
Locations
Journal of Political Economy (publishedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Stochastic processes and financial applications
  • Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Financial Reporting and Valuation Research
Keywords
option pricing, corporate liability, arbitrage, portfolio hedging, warrants, corporate bonds, default risk, common stock, real options

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