Pricing and Net Profit of Operating Lease
Managerial Finance - Volume 35, Issue 10, 2009, pp. 828-840
19 Pages Posted: 5 May 2013
Date Written: May 4, 2009
This paper analyzes the impact of the so-called “asset risk” on optimal management of operating lease. We propose a tool to debunk some common mistakes in determining the value at which the leased asset can be retained by the lessee by paying a predetermined amount at contract maturity.
Keywords: lease, asset risk, option pricing theory
JEL Classification: G12, G21
Suggested Citation: Suggested Citation