Exercise | February 1993 (Revised December 1994)

Corporate Financial Management: Options Exercises

by Timothy A. Luehrman


This case presents four exercises designed to introduce students to applications of option pricing and decision-tree analysis to real corporate investment problems. Two of the four problems involve decision trees and two involve option pricing. Students should be familiar with basic option pricing theory (Black-Scholes and/or the Binomial Model) before being assigned these exercises.

Keywords: Financial Management; Investment; Projects; Corporate Finance;


Luehrman, Timothy A. "Corporate Financial Management: Options Exercises." Harvard Business School Exercise 293-095, February 1993. (Revised December 1994.)