We extend risk-value models for valuing streams of risky cash flows by introducing the well-known concept of terminal value (based on the application of the perpetuity formula) in this context, where it cannot be used straight forward. For a constant growth assumption we are able to derive upper...

Many financial contracts are equipped with exercise rights or other features enabling the parties to actively shape the contract's payoff. These decisions pose a great challenge for the pricing and hedging of such contracts. Yet, the literature lacks a consistent way of dealing with these...