Numerical analysis of corporate claims

The basis of the model is the Cox,Ingersoll,Ross(1978) partial differential equations for the value of an asset. This equation is itself the result of combining the Black-Scholes model with the assumption that the pricing function for securities is consistent with rational expectations. The model is used to analyze the financing and investment strategies of a hypothetical firm. In this paper, a numerical solution algorithm by explicit difference schemes is given for the equations. We also draw graphs of numerical solution of hypothetical firm using Matlab software.