As you may have noticed over the course of the past few months, Ipreo’s Private Capital Markets team is full of subject-matter experts who are willing and able to expound upon a wide variety of topics affecting the individuals and firms dealing in the private capital space.
Recently, Ipreo PCM has contributed compelling pieces about DLOM (part one, part two), Volatility (part one, part two, part three), and Kevin Black, Ipreo PCM’s Managing Director, sat down with the Ipreo Blog to discuss the challenges facing private capital markets.
Today, the team is back with the first in a two-part series on the option pricing model. David Mesner, a Valuation Analyst specializing in business and securities valuation engagements for corporate finance, financial reporting, and tax purposes, put together two pieces on OPM. The series kicks off with a report on the allocation of value.
There are some parameters that can lend perspective into the future goals and milestones set by the company, and historical information can be gathered as well to paint a better picture. To best reflect the uncertainty of potential increases and decreases over time as well as perceived risk, the Option Pricing Model (OPM) is applied. This is also the most common allocation method used by Ipreo Private Capital Markets team.
Read the full Special Report – The Option Pricing Model: Allocation of Value
Next week, we’ll be back with part two.