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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Investment Cost Uncertainty Expected cost <strong>to</strong> comple*on follows (technical uncertainty): 2dK = −Idt+ σ ( IK)1dzVariance <strong>of</strong> cost <strong>to</strong> comple*on:~Var(K)=σ2K2 −σ22λ :Poisson Pr obability<strong>of</strong>Failure