The real options approach to valuation - Haskayne School of Business
The real options approach to valuation - Haskayne School of Business
The real options approach to valuation - Haskayne School of Business
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Using Real Op*ons • Uncertainty and the firm’s ability <strong>to</strong> respond <strong>to</strong> it (flexibility) are the source <strong>of</strong> value <strong>of</strong> an op*on • When not <strong>to</strong> use <strong>real</strong> op*ons: – When there are no op*ons at all – When there is liXle uncertainty – When consequences <strong>of</strong> uncertainty can be ignored • Most projects are subject <strong>to</strong> op*ons valua*on