The last two decades have seen a stream of innovation in financial markets, especially in corporate bonds. Some of these innovations-notably, hybrid debt-have provided firms with more flexibility in designing cash flows on borrowings, allowing them to match cash flows on financing more closely...

In recent years, both practitioners and academics have argued that traditional discounted cash flow models do a poor job of capturing the value of the options embedded in many corporate actions. This paper shows how option pricing models used in valuing financial assets can be used to value...