  For a public company, pricing and hedging models of options and
equity--linked life insurance products have been sufficiently developed.
However, for a private company, because of unobserved prices, pricing and
hedging models of the European options and life insurance products are in their
early stages of development. For this reason, this paper introduces a log
private company valuation model, which is based on the dynamic Gordon growth
model. In this paper, we obtain closed--form pricing and hedging formulas of
the European options and equity--linked life insurance products for private
companies. Also, the paper provides Maximum Likelihood (ML) estimators of our
model, Expectation Maximization (EM) algorithm, and valuation formula for
private companies.
