Search results

Filters

  • Journals
  • Keywords

Search results

Number of results: 1
items per page: 25 50 75
Sort by:
Download PDF Download RIS Download Bibtex

Abstract

In the last decades Real Options Valuation (ROV) has been gaining a leading role among methods of economic evaluation and risk analysis of projects. This method enables valuation of managerial flexibility which includes postponing investments and reformulating of operating strategies of companies. By doing this, the method delivers higher project values than derived from the classical discount approaches, such as NPV. The value of flexibility may be of lower or greater importance - depending on types, configuration and sequence of occurring real options. Common methods of real options valuation are built on lattice models which approximate continuous stochastic process. One of the most popular techniques used for real options valuation - a marketed asset disclaimer approach (MAD) - is based on the binomial tree. The paper presents valuation of the mineral project with three simultaneous options: option-to-expand, option-to-contract and option-to-abandon.

Go to article

Authors and Affiliations

Piotr Saługa

This page uses 'cookies'. Learn more