Real Options In Capital Investment

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Real Options in Capital Investment

Lenos Trigeorgis
Real Options in Capital Investment Book PDF

Author : Lenos Trigeorgis
Publisher : Bloomsbury Publishing USA
Page : 382 pages
File Size : 47,7 Mb
Release : 1995-01-24
Category : Business & Economics
ISBN : 9780313020827

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Real Options in Capital Investment by Lenos Trigeorgis Pdf

This compilation integrates various new contributions to the growing real options literature. Recent developments in the valuation of capital investment opportunities seen as real options (e.g. to defer, expand, abandon, or switch) have provided the tools and unlocked the possibilities to revolutionize the field of capital budgeting. The resulting insights, strategies, and techniques enable quantifying the thus far elusive elements of managerial operating flexibility and strategic interactions. These are vital to successfully capitalize on favorable future investment opportunities or limit losses from adverse market developments. This book presents various models and operating strategies, and a variety of applications ranging from acquisitions and divestitures, to natural resource development and pollution compliance. It is intended for both the academic and the professional market. The book's contributions are divided into five parts, covering sections on real options and alternative valuation paradigms for capital investment analysis; on the analysis of general exchange or switching options, and interdependencies among multiple such options; on strategic acquisitions, infrastructure, and foreign investment options; on mean reversion/ alternative formulations in natural resource investments, shipping, and start-up ventures; and on other applications in pollution compliance, land development, flexible manufacturing, and financial default options. Both academic and practitioner interest in these developments is unusually high. The book can serve as supplementary material for the academic market, e.g., in advanced finance courses in option pricing or capital budgeting, in doctoral seminars, and as a library resource. It may also be of interest to the professional market (e.g. corporate planners and finance executives in the oil, pharmaceutical, auto and a variety of other industries), academics from related areas (e.g. decision analysts or economists), as well as to international readers (academics, doctoral students, and professionals).

Real Options

Lenos Trigeorgis
Real Options Book PDF

Author : Lenos Trigeorgis
Publisher : MIT Press
Page : 452 pages
File Size : 41,7 Mb
Release : 1996-03-14
Category : Business & Economics
ISBN : 026220102X

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Real Options by Lenos Trigeorgis Pdf

Comprehensive in scope, Real Options reviews current techniques of capital budgeting and details an approach (based on the pricing of options) that provides a means of quantifying the elusive elements of managerial flexibility in the face of unexpected changes in the market. In the 1970s and the 1980s, developments in the valuation of capital-investment opportunities based on options pricing revolutionized capital budgeting. Managerial flexibility to adapt and revise future decisions in order to capitalize on favorable future opportunities or to limit losses has proven vital to long-term corporate success in an uncertain and changing marketplace. In this book Lenos Trigeorgis, who has helped shape the field of real options, brings together a wealth of previously scattered knowledge and research on the new flexibility in corporate resource allocation and in the evaluation of investment alternatives brought about by the shift from static cash-flow approaches to the more dynamic paradigm of real options—an approach that incorporates decisions on whether to defer, expand, contract, abandon, switch use, or otherwise alter a capital investment. Comprehensive in scope, Real Options reviews current techniques of capital budgeting and details an approach (based on the pricing of options) that provides a means of quantifying the elusive elements of managerial flexibility in the face of unexpected changes in the market. Also discussed are the strategic value of new technology, project interdependence, and competitive interaction. The ability to value real options has so dramatically altered the way in which corporate resources are allocated that future textbooks on capital budgeting will bear little resemblance to those of even the recent past. Real Options is a pioneer in this area, coupling a coherent picture of how option theory is used with practical insights in into real-world applications.

Real Options

Martha Amram,Nalin Kulatilaka
Real Options Book PDF

Author : Martha Amram,Nalin Kulatilaka
Publisher : Oxford University Press on Demand
Page : 246 pages
File Size : 43,8 Mb
Release : 1999
Category : Business & Economics
ISBN : 0875848451

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Real Options by Martha Amram,Nalin Kulatilaka Pdf

Using real-world examples and clear case studies, the authors provide investors and managers with an innovative method for assessing a company's non-financial assets, allowing them to assess opportunities whose financial rewards are less than certain.

Real Options and Investment Under Uncertainty

Eduardo S. Schwartz,Lenos Trigeorgis
Real Options and Investment Under Uncertainty Book PDF

Author : Eduardo S. Schwartz,Lenos Trigeorgis
Publisher : MIT Press
Page : 890 pages
File Size : 49,9 Mb
Release : 2004
Category : Business & Economics
ISBN : 0262693186

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Real Options and Investment Under Uncertainty by Eduardo S. Schwartz,Lenos Trigeorgis Pdf

The study of investment under uncertainty was stagnant for several decades until developments in real options revitalized the field. The topics covered in this book include the reasons behind the under-investment programme.

Real Options Theory

Jeffrey J. Reuer,Tony W. Tong
Real Options Theory Book PDF

Author : Jeffrey J. Reuer,Tony W. Tong
Publisher : Emerald Group Publishing
Page : 520 pages
File Size : 46,8 Mb
Release : 2007-07-05
Category : Business & Economics
ISBN : 9781849504942

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Real Options Theory by Jeffrey J. Reuer,Tony W. Tong Pdf

Examines the ways in which real options theory can contribute to strategic management. This volume offers conceptual pieces that trace out pathways for the theory to move forward and presents research on the implications of real options for strategic investment, organization, and firm performance.

Strategic Investment

Han T. J. Smit,Lenos Trigeorgis
Strategic Investment Book PDF

Author : Han T. J. Smit,Lenos Trigeorgis
Publisher : Princeton University Press
Page : 504 pages
File Size : 52,5 Mb
Release : 2012-01-12
Category : Business & Economics
ISBN : 9781400829392

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Strategic Investment by Han T. J. Smit,Lenos Trigeorgis Pdf

Corporate finance and corporate strategy have long been seen as different sides of the same coin. Though both focus on the same broad problem, investment decision-making, the gap between the two sides--and between theory and practice--remains embarrassingly large. This book synthesizes cutting-edge developments in corporate finance and related fields--in particular, real options and game theory--to help bridge this gap. In clear, straightforward exposition and through numerous examples and applications from various industries, Han Smit and Lenos Trigeorgis set forth an extended valuation framework for competitive strategies. The book follows a problem-solving approach that synthesizes ideas from game theory, real options, and strategy. Thinking in terms of options-games can help managers address questions such as: When is it best to invest early to preempt competitive entry, and when to wait? Should a firm compete in R&D or adopt an accommodating stance? How does one value growth options or infrastructure investments? The authors provide a wide range of valuation examples, such as acquisition strategies, R&D investment in high-tech sectors, joint research ventures, product introductions in consumer electronics, infrastructure, and oil exploration investment. Representing a major step beyond standard real options or strategy analysis, and extending the power of real options and strategic thinking in a rigorous fashion, Strategic Investment will be an indispensable guide and resource for corporate managers, MBA students, and academics alike.

Real Options Analysis

Johnathan Mun
Real Options Analysis Book PDF

Author : Johnathan Mun
Publisher : John Wiley & Sons
Page : 603 pages
File Size : 40,8 Mb
Release : 2012-07-02
Category : Business & Economics
ISBN : 9781118429075

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Real Options Analysis by Johnathan Mun Pdf

"Mun demystifies real options analysis and delivers a powerful, pragmatic guide for decision-makers and practitioners alike. Finally, there is a book that equips professionals to easily recognize, value, and seize real options in the world around them." --Jim Schreckengast, Senior VP, R&D Strategy, Gemplus International SA, France Completely revised and updated to meet the challenges of today's dynamic business environment, Real Options Analysis, Second Edition offers you a fresh look at evaluating capital investment strategies by taking the strategic decision-making process into consideration. This comprehensive guide provides both a qualitative and quantitative description of real options; the methods used in solving real options; why and when they are used; and the applicability of these methods in decision making.

Real Options in Practice

Marion A. Brach
Real Options in Practice Book PDF

Author : Marion A. Brach
Publisher : John Wiley & Sons
Page : 384 pages
File Size : 43,9 Mb
Release : 2003-04-07
Category : Business & Economics
ISBN : 9780471445562

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Real Options in Practice by Marion A. Brach Pdf

Explores real option theory applied in practice Real options are quickly becoming the valuation and decision-making method of choice for many companies, including oil and gas companies, utilities and natural resource companies, pharmaceutical and biotech companies, Internet companies, and many others. Real Options in Practice allows readers to view the world of real options from the vantage point of a corporate practitioner applying real option valuation techniques on a regular basis. Expert Marion Brach describes the challenges of implementing a real option framework in practice within a corporate setting. Touching on the real options most firms care about, Real Options in Practice identifies the classic types of real options-deferral, abandonment, switching, expansion, and compound-and explores the main concepts critical to understanding real option theory. Through Brach's own three-step real option valuation method readers will learn how the theory of real options is now being applied to drive better, more profitable corporate decision-making. Marion A. Brach, MD, MBA (Hagen, Germany), has undertaken financial valuation of business opportunities and acquisitions using scenario and real option valuation in the biotech industry. A recognized expert on real option theory and practice, Brach received her MBA from the Manchester Business School and frequently speaks at real option seminars.

Real R & D Options

Dean Paxson
Real R D Options Book PDF

Author : Dean Paxson
Publisher : Butterworth-Heinemann
Page : 356 pages
File Size : 43,9 Mb
Release : 2003-01-17
Category : Business & Economics
ISBN : 0750653329

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Real R & D Options by Dean Paxson Pdf

This text addresses a wide range of issues in valuation using the Real Options technique. It covers the whole area of Real Options and looks closely at developments, especially in valuing technology companies. Authors in Europe, North and South America, Asia and Africa provide seven Real Options models and applications.

The New Investment Theory of Real Options and its Implication for Telecommunications Economics

James J. Alleman,Eli M. Noam
The New Investment Theory of Real Options and its Implication for Telecommunications Economics Book PDF

Author : James J. Alleman,Eli M. Noam
Publisher : Springer Science & Business Media
Page : 274 pages
File Size : 40,6 Mb
Release : 2007-08-19
Category : Business & Economics
ISBN : 9780585333144

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The New Investment Theory of Real Options and its Implication for Telecommunications Economics by James J. Alleman,Eli M. Noam Pdf

Randall B, Lowe Piper & Marbury, L.L.R The issue of costing and pricing in the telecommunications industry has been hotly debated for the last twenty years. Indeed, we are still wrestling today over the cost of the local exchange for access by interexchange and competitive local ex change carriers, as well as for universal service funding. The U.S. telecommunications world was a simple one before the emergence of competition, comprising only AT&T and independent local exchange carriers. Costs were allocated between intrastate and interstate jurisdictions and then again, between intrastate local and toll. The Bell System then divided those costs among itself (using a process referred to as the division of revenues) and independents (using a process called settlements). Tolls subsidized local calls to keep the politi cians happy, and the firm, as a whole, covered its costs and made a fair return. State regulators, however, lacked the wherewithal to audit this process. Their con cerns centered generally on whether local rates, irrespective of costs, were at a po litically acceptable level. Although federal regulators were better able to determine the reasonableness of the process and the resulting costs, they adopted an approach of "continuous surveillance" where, like the state regulator, the appearance of rea sonableness was what mattered. With the advent of competition, this historical costing predicate had to change. The Bell System, as well as the independents, were suddenly held accountable.

Real Options Analysis Course

Johnathan Mun
Real Options Analysis Course Book PDF

Author : Johnathan Mun
Publisher : John Wiley & Sons
Page : 321 pages
File Size : 49,7 Mb
Release : 2003-04-15
Category : Business & Economics
ISBN : 9780471465348

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Real Options Analysis Course by Johnathan Mun Pdf

Praise for Real Options Analysis Course "Dr. Mun's latest book is a logical extension of the theory and application presented in Real Options Analysis. More specifically, the Real Options Analysis Course presents numerous real options examples and provides the reader with step-by-step problem-solving techniques. After having read the book, readers will better understand the underlying theory and the opportunities for applying real option theory in corporate decision-making." -Chris D. Treharne, President, Gibraltar Business Appraisals, Inc. "This text provides an excellent follow up to Dr. Mun's first book, Real Options Analysis. The cases in Real Options Analysis Course provide numerous examples of how the use of real options and the Real Options Analysis Toolkit software can assist in the valuation of strategic and managerial flexibility in a variety of arenas." -Charles T. Hardy, PhD, Chief Financial Officer & Director of Business Development, Panorama Research, Inc. "Most of us come to real options from the perspective of our own areas of expertise. Mun's great skill with this book is in making real options analysis understandable, relevant, and immediately applicable to the field within which you are working." -Robert Fourt, Partner, Gerald Eve (UK) "Mun provides a practical step-by-step guide to applying simulation and real options analysis-invaluable to those of us who are no longer satisfied with conventional valuation approaches alone." -Fred Kohli, Head of Portfolio Management, Syngenta Crop Protection Ltd. (Switzerland)

Capital Investment & Financing

Chris f Agar
Capital Investment Financing Book PDF

Author : Chris f Agar
Publisher : Elsevier
Page : 448 pages
File Size : 43,9 Mb
Release : 2005-05-06
Category : Business & Economics
ISBN : 9780080476384

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Capital Investment & Financing by Chris f Agar Pdf

The requirement to maximise value for shareholders is at the core of any corporate investment or financing decision. The intrinsic value of proposed investments should be assessed before deciding how much capital to allocate; the benefits and risks associated with each available source of finance should be considered when capital is being raised; and capital, and any associated financial risks, should be managed in a way that continues to maximise value. At every stage, an analysis should be carried out to ensure the decision is optimal for shareholders and other capital providers. This book provides practical guidance on the application of financial evaluation techniques and methods (mainly covered in Appendices), as well as comprehensive coverage of traditional corporate finance topics, discussed in the context of capital investment, raising and management and financial risk management (using derivatives). Models, formulae and other quantitative techniques are illustrated in over 100 examples (using only basic mathematics). Topics discussed include the following: * business appraisal using financial ratios * corporate valuation (mainly discounted cash flow and real options) *investment appraisal techniques * acquisition structuring and evaluation * the nature of loans and loan agreements * features and pricing of bonds (straight and convertible) * leasing (including leveraged leasing) * equity raising (Initial Public Offerings) * long and short term capital management * basic pricing of derivatives (forwards, futures, options, swaps) * interest rate and currency risk management using derivatives Capital Investment & Financing provides a comprehensive, in-depth coverage of concepts, methods and techniques involved when evaluating acquisitions and other investments, assessing financing opportunities, and managing capital. The core chapters provide practical guidance on key corporate finance topics; the Appendices contain more quantitative material, focusing on pricing techniques. Examples are used throughout, and an integrated case study (fictional) in the final Appendix uses many of the techniques discussed. *Discusses all key areas of corporate investing and financing, focusing on key financial issues *Concise, thorough and technical, it enables to reader to acquire knowledge effectively *Can be used in everyday analysis and decision making

Project Valuation Using Real Options

Prasad Kodukula,Chandra Papudesu
Project Valuation Using Real Options Book PDF

Author : Prasad Kodukula,Chandra Papudesu
Publisher : J. Ross Publishing
Page : 256 pages
File Size : 53,9 Mb
Release : 2006-07-15
Category : Business & Economics
ISBN : 1932159436

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Project Valuation Using Real Options by Prasad Kodukula,Chandra Papudesu Pdf

Business leaders are frequently faced with investment decisions on new and ongoing projects. The challenge lies in deciding what projects to choose, expand, contract, defer, or abandon, and which method of valuation to use is the key tool in the process. This title presents a step-by-step, practical approach to real options valuation to make it easily understandable by practitioners as well as senior management. This systematic approach to project valuation helps you minimize upfront investment risks, exercise flexibility in decision making, and maximize the returns. Whereas the traditional decision tools such as discounted cash flow/net present value (DCF/NPV) analysis assume a “fixed” path ahead, real options analysis offers more flexible strategies. Considered one of the greatest innovations of modern finance, the real options approach is based on Nobel-prize winning work by three MIT economists, Fischer Black, Robert Merton, and Myron Scholes.

Capital Budgeting Valuation

H. Kent Baker,Philip English
Capital Budgeting Valuation Book PDF

Author : H. Kent Baker,Philip English
Publisher : John Wiley & Sons
Page : 533 pages
File Size : 45,7 Mb
Release : 2011-06-28
Category : Business & Economics
ISBN : 9780470569504

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Capital Budgeting Valuation by H. Kent Baker,Philip English Pdf

An essential guide to valuation techniques and financial analysis With the collapse of the economy and financial systems, many institutions are reevaluating what they are willing to spend money on. Project valuation is key to both cost effectiveness measures and shareholder value. The purpose of this book is to provide a comprehensive examination of critical capital budgeting topics. Coverage extends from discussing basic concepts, principles, and techniques to their application to increasingly complex, real-world situations. Throughout, the book emphasizes how financially sound capital budgeting facilitates the process of value creation and discusses why various theories make sense and how firms can use them to solve problems and create wealth. Offers a strategic focus on the application of various techniques and approaches related to a firm's overall strategy Provides coverage of international topics based on the premise that managers should view business from a global perspective Emphasizes the importance of using real options Comprised of contributed chapters from both experienced professionals and academics, Capital Budgeting Valuation offers a variety of perspectives and a rich interplay of ideas related to this important financial discipline.

Investment under Uncertainty

Robert K. Dixit,Robert S. Pindyck
Investment under Uncertainty Book PDF

Author : Robert K. Dixit,Robert S. Pindyck
Publisher : Princeton University Press
Page : 484 pages
File Size : 43,7 Mb
Release : 2012-07-14
Category : Business & Economics
ISBN : 9781400830176

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Investment under Uncertainty by Robert K. Dixit,Robert S. Pindyck Pdf

How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending. This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.