Making Real Options Valuation a Real Option.

Autor:	Aspinall, Thomas, Meyer, Benjamin, Southam, Colette
Předmět:	REAL options (Finance), VALUATION, MONTE Carlo method, GOLD sales & prices
Zdroj:	Ivey Business Journal. Jan/Feb2023, p2-5. 4p.
Abstrakt:	When it comes to valuing projects in highly uncertain business environments, real options valuation (ROV) isn't popular as a management tool despite having long been touted as a best practice in academic circles. This gold price volatility results in a higher project value with ROV, consistent with the well-documented evidence that NPV systematically undervalues risky investments (van Putten and MacMillan, 2004). The Value of Real Options Valuation Industry relies heavily on static DCF techniques -- such as a project's net present value (NPV) or internal rate of return (IRR) -- which implicitly assume that the only decision that matters is the initial decision to invest. [Extracted from the article]
Databáze:	Regional Business News
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