Real Options: A Practitioner's GuideThis revised edition of the highly successful book, Real Options, offers corporate decision-makers the ability to assess the profitability of their ventures and decide which avenue of expansion or investment to go down and, crucially, when to take that leap. The reader goes on a journey through real options, from the basics to more advanced topics such as options and game theory. It provides expert guidance on how to implement the theory to maximize investment opportunities by utilizing uncertainty as an asset and reducing downside risk. |
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Real Options: A Practitioner's Guide Thomas E. Copeland,Vladimir Antikarov No preview available - 2003 |
Common terms and phrases
Airbus aircraft airline American call American call options assume assumptions binomial lattice binomial tree Black-Scholes formula C₁ calculate call option cell Chapter compound options confidence band correlated cost of capital d₁ decision tree deferral option discount rate dividend end-of-period equation equity estimate event tree example exercise price expected cash flows free cash flows hedge portfolio illustrated in Exhibit investment million Monte Carlo analysis net present value optimal option to expand parameters payoffs payouts period phase present value problem project with flexibility project without flexibility quantity rate of return real options analysis replicating portfolio approach result risk risk-adjusted risk-free rate risk-neutral probabilities shareholders shown in Exhibit solve sources of uncertainty spot price spreadsheet standard deviation straight to market switching options tion twin security underlying asset underlying risky asset V₁ valuation value tree variable WACC weighted average cost zero