This is one of the legendary papers in finance, where **Fischer Black** and **Myron Scholes** introduced their methodology of option pricing that is now known as the Black-Scholes(-Merton) Option Pricing Model. **The Pricing of Options and Corporate Liabilities** was first published in the **Journal of Political Economy**, Vol. 81, No. 3 (May – Jun 1973), pp. 637-654, The University of Chicago Press.

## The Pricing of Options and Corporate Liabilities PDF

Here you can **download the paper in pdf for free** (the following links are working as I am updating this post in December 2021 – if one fails, try another; if all fail, try Google):

- Princeton University, Department of Computer Science
- Princeton University, Department of Computer Science #2

## F. Black about The Pricing of Options and Corporate Liabilities, 1987

This is an interesting **one-page article where Fischer Black briefly describes the process** that led him and Myron Scholes to discovering their option pricing model and how *The Pricing of Options and Corporate Liabilities* was first rejected by the *Journal of Political Economy* and accepted only after a suggestion by Merton Miller and Eugene Fama.

Download link: https://garfield.library.upenn.edu/classics1987/A1987J461500001.pdf

## Merton's Extension of the Black-Scholes Model

**Robert C. Merton** further examined the model introduced in *The Pricing of Options and Corporate Liabilities*, derived an alternative formula, and provided several extensions of the model. Together with *The Pricing of Options and Corporate Liabilities*, Merton's Theory of Rational Option Pricing (1973) represents the foundation of what is now known as the **Black-Scholes(-Merton) Option Pricing Model**.