Equity Warrants Pricing Formula for Uncertain Financial Market

Abstract

In this paper, inside the system of uncertainty theory, the valuation of equity warrants is explored. Different from the strategies of probability theory, the valuation problem of equity warrants is unraveled by utilizing the strategy of uncertain calculus. Based on the suspicion that the firm price follows an uncertain differential equation, a valuation formula of equity warrants is proposed for an uncertain stock model.

Keywords

• equity warrants
• uncertainty theory
• uncertain stock model