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Author: Jeffrey J. Reuer
Publisher: Emerald Group Publishing
ISBN: 1849504946
Category : Business & Economics
Languages : en
Pages : 520
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Book Description
Examines the ways in which real options theory can contribute to strategic management. This volume offers conceptual pieces that trace out pathways for the theory to move forward and presents research on the implications of real options for strategic investment, organization, and firm performance.
Author: Jeffrey J. Reuer
Publisher: Emerald Group Publishing
ISBN: 1849504946
Category : Business & Economics
Languages : en
Pages : 520
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Book Description
Examines the ways in which real options theory can contribute to strategic management. This volume offers conceptual pieces that trace out pathways for the theory to move forward and presents research on the implications of real options for strategic investment, organization, and firm performance.
Author: J. Rogers
Publisher: Springer
ISBN: 0230513050
Category : Business & Economics
Languages : en
Pages : 151
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Book Description
In the 1990s shareholder value was applied to all aspects of corporate strategy and management decisions as a result of intense competition, globalization, advances in technology, deregulation and the financial markets. As we enter the twentyfirst century the business environment is one of increasing creative destruction, where competitive advantage is much harder to sustain. Real Options , a type of advanced financial analysis, applies financial option theory to real assets and offers a strategic framework that recognizes the need for management flexibility and to leverage risk in this corporate environment.
Author: Asen Kolaksazov
Publisher: GRIN Verlag
ISBN: 3656957452
Category : Business & Economics
Languages : en
Pages : 77
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Book Description
Master's Thesis from the year 2012 in the subject Business economics - Investment and Finance, grade: Merit, University of Portsmouth (Business School), course: Masterarbeit - Risk Management, language: English, abstract: Numerous managers associate uncertainty with a bad outcome which should be averted. This thesis’ aim is to provide the opposite view. This dissertation will reveal the strategic potential hidden in each investment. If one firm is on the right track, it could obtain profit from the uncertainty. Uncertainty could generate value and capture a market share. Real option approach will present the way how this key aspect could be evaluated. The roots of the real option approach are derived from the emblematic formula for the finance world of Fischer Black, Robert Merton and Myron Scholes. The revolutionary in their work is that complex contracts could be evaluated. The option-pricing theory take unalterable place not only in financial but also in the real investments. In addition to this, the real option approach becomes a very powerful tool for managing the real assets. This approach could be used in a wide spectrum of managing action. For all the managers who associate uncertainty and risk with a bad aftermath, the real option approach offers a solution for their worries and could advise them with an appropriate way to operate an investment (Amram, 1999, p. vii). In this work would be made practical as well as theoretical overarching from financial to real options. Chapter 6 is very constructive and useful for future research purposes, because it is suitable contribution to risk management analysis, and it uses a combination of volatility with option pricing, which can calculate more precisely the project risk.
Author: Han T. J. Smit
Publisher: Princeton University Press
ISBN: 1400829399
Category : Business & Economics
Languages : en
Pages : 504
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Book Description
Corporate finance and corporate strategy have long been seen as different sides of the same coin. Though both focus on the same broad problem, investment decision-making, the gap between the two sides--and between theory and practice--remains embarrassingly large. This book synthesizes cutting-edge developments in corporate finance and related fields--in particular, real options and game theory--to help bridge this gap. In clear, straightforward exposition and through numerous examples and applications from various industries, Han Smit and Lenos Trigeorgis set forth an extended valuation framework for competitive strategies. The book follows a problem-solving approach that synthesizes ideas from game theory, real options, and strategy. Thinking in terms of options-games can help managers address questions such as: When is it best to invest early to preempt competitive entry, and when to wait? Should a firm compete in R&D or adopt an accommodating stance? How does one value growth options or infrastructure investments? The authors provide a wide range of valuation examples, such as acquisition strategies, R&D investment in high-tech sectors, joint research ventures, product introductions in consumer electronics, infrastructure, and oil exploration investment. Representing a major step beyond standard real options or strategy analysis, and extending the power of real options and strategic thinking in a rigorous fashion, Strategic Investment will be an indispensable guide and resource for corporate managers, MBA students, and academics alike.
Author: Marion A. Brach
Publisher: John Wiley & Sons
ISBN: 0471445568
Category : Business & Economics
Languages : en
Pages : 384
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Book Description
Explores real option theory applied in practice Real options are quickly becoming the valuation and decision-making method of choice for many companies, including oil and gas companies, utilities and natural resource companies, pharmaceutical and biotech companies, Internet companies, and many others. Real Options in Practice allows readers to view the world of real options from the vantage point of a corporate practitioner applying real option valuation techniques on a regular basis. Expert Marion Brach describes the challenges of implementing a real option framework in practice within a corporate setting. Touching on the real options most firms care about, Real Options in Practice identifies the classic types of real options-deferral, abandonment, switching, expansion, and compound-and explores the main concepts critical to understanding real option theory. Through Brach's own three-step real option valuation method readers will learn how the theory of real options is now being applied to drive better, more profitable corporate decision-making. Marion A. Brach, MD, MBA (Hagen, Germany), has undertaken financial valuation of business opportunities and acquisitions using scenario and real option valuation in the biotech industry. A recognized expert on real option theory and practice, Brach received her MBA from the Manchester Business School and frequently speaks at real option seminars.
Author: Prasad Kodukula
Publisher: J. Ross Publishing
ISBN: 9781932159431
Category : Business & Economics
Languages : en
Pages : 256
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Book Description
Business leaders are frequently faced with investment decisions on new and ongoing projects. The challenge lies in deciding what projects to choose, expand, contract, defer, or abandon, and which method of valuation to use is the key tool in the process. This title presents a step-by-step, practical approach to real options valuation to make it easily understandable by practitioners as well as senior management. This systematic approach to project valuation helps you minimize upfront investment risks, exercise flexibility in decision making, and maximize the returns. Whereas the traditional decision tools such as discounted cash flow/net present value (DCF/NPV) analysis assume a “fixed” path ahead, real options analysis offers more flexible strategies. Considered one of the greatest innovations of modern finance, the real options approach is based on Nobel-prize winning work by three MIT economists, Fischer Black, Robert Merton, and Myron Scholes.
Author: Eduardo S. Schwartz
Publisher: MIT Press
ISBN: 9780262693189
Category : Business & Economics
Languages : en
Pages : 890
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Book Description
The study of investment under uncertainty was stagnant for several decades until developments in real options revitalized the field. The topics covered in this book include the reasons behind the under-investment programme.
Author: F. Peter Boer
Publisher: John Wiley & Sons
ISBN: 0471421278
Category : Business & Economics
Languages : en
Pages : 434
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Book Description
Harness the power of real options Real options theory is based on the Nobel Prize--winning work on financial options, and has captured the interest of executives, managers, and investors who need to understand the future profitability of an asset. Originally developed to value technology initiatives and companies, the method is now being applied broadly across various businesses and industries. The Real Options Solution offers comprehensive coverage of the real options approach with a five-step framework and examples for applying the author's unique total value model based on real options analysis. This approach will help executives and investors minimize the risk of committing to new ventures and delivers a framework flexible enough to apply to business initiatives in all types of companies.
Author: Richard De Neufville
Publisher: Prentice Hall
ISBN:
Category : Mathematics
Languages : en
Pages : 456
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Book Description
Author: Alexander Vollert
Publisher: Springer Science & Business Media
ISBN: 1461220688
Category : Mathematics
Languages : en
Pages : 275
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Book Description
The theoretical foundation for real options goes back to the mid 1980s and the development of a model that forms the basis for many current applications of real option theory. Over the last decade the theory has rapidly expanded and become enriched thanks to increasing research activity. Modern real option theory may be used for the valuation of entire companies as well as for particular investment projects in the presence of uncertainty. As such, the theory of real options can serve as a tool for more practically oriented decision making, providing management with strategies maximizing its capital market value. This book is devoted to examining a new framework for classifying real options from a management and a valuation perspective, giving the advantages and disadvantages of the real option approach. Impulse control theory and the theory of optimal stopping combined with methods of mathematical finance are used to construct arbitrarily complex real option models which can be solved numerically and which yield optimal capital market strategies and values. Various examples are given to demonstrate the potential of this framework. This work will benefit the financial community, companies, as well as academics in mathematical finance by providing an important extension of real option research from both a theoretical and practical point of view.
