A Layperson’s Guide to the OPM: Everything You Always Wanted to Know About the OPM, But Were Afraid to Ask (Part 1)

The option pricing model, or OPM, is one of the shiniest new tools in the valuation specialist’s toolkit.  Travis W. Harms, Mercer Capital Financial Reporting Valuation Group lead, discusses the purpose of this post is to clarify the fundamental insight underlying the model and illustrate its application so that non-specialist users of valuation reports can gain greater comfort with the model.  Part 2 will address some qualitative concerns regarding use of the method in practice.

To read the full article in Mercer Capital’s Financial Reporting Blog, click: A Layperson’s Guide to the OPM: Everything You Always Wanted to Know About the OPM, But Were Afraid to Ask (Part 1).

This article is republished from Mercer Capital’s Financial Reporting Blog.  It is reprinted with permission.  To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.