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Valuing Announcement Options

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  • Dempster, Anna

Abstract

This paper introduces a theory of corporate announcements based on the new concept of an announcement option which has not been previously recognized in the literature as an independently valuable real option de-coupled from strategy implementation. While contributing to the strategy and real options literature, the paper also bridges the corporate disclosure literature and theories of signalling. By conceptualising corporate announcements as real options, the paper provides a framework and focuses on a methodology for precisely valuing announcements. To illustrate the use and valuation of announcement options, the historical case of Prudential plc's announcements concerning its internet venture Egg is analysed.

Suggested Citation

  • Dempster, Anna, 0. "Valuing Announcement Options," European Management Journal, Elsevier, vol. 24(2-3), pages 117-127, April.
    • Handle: RePEc:eee:eurman:v:24:y::i:2-3:p:117-127
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    Citations

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    Cited by:

    1. Waters, James, 2015. "Optimal design and consequences of financial disclosure regulation: a real options approach," MPRA Paper 63369, University Library of Munich, Germany.
    2. Delaney, L. & Thijssen, J., 2011. "Valuing voluntary disclosure using a real options approach," Working Papers 11/06, Department of Economics, City University London.
    3. Delaney, Laura & Thijssen, Jacco J.J., 2015. "The impact of voluntary disclosure on a firm’s investment policy," European Journal of Operational Research, Elsevier, vol. 242(1), pages 232-242.
    4. Jesper Lindgaard Christensen, 2008. "The IPR System, Venture Capital and Capital Markets – Contributions and Distortions of Small Firm Innovation?," DRUID Working Papers 08-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    5. Laura Delaney & Jacco J.J. Thijssen, "undated". "Valuing Voluntary Disclosure using a Real Options Approach," Discussion Papers 11/13, Department of Economics, University of York.

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