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630 -- S9 1) In many business decision scenario...




630 -- S9 1) In many business decision scenarios, managers faces the dilemma, for example, whether to continue the project or to abandon it, whether to finance a project with debt or equity, etc. How can we apply the knowledge of traditional option pricing techniques in such decisions that involve real impact on the cash flows of a business? 2) Many academics strongly advocate using real options in the valuation of intangible assets. Nevertheless, this method is not used in practice very often. In your opinion, what are the reasons for not seeing real option valuations of intangibles more often? Although attached article does not talk about real options, it shows how tricky it is to value such intangible asset as company's reputation (or its loss).


Paper#1730 | Written in 18-Jul-2015

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