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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Tradi*onal Valua*on Tools (DCF) • Require forecasts – A single expected value <strong>of</strong> future cash flows is generally used – Difficulty for finding an appropriate discount rate when op*ons (e.g., exit op*on) are present • Future decisions are fixed at the outset – no flexibility for taking decisions during the course <strong>of</strong> the investment project