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Real Options and Interactions With Financial Flexibility

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Author Info
Lenos Trigeorgis
Abstract

This article serves two main purposes. First, it aims to provide a comprehensive overview of the existing real options literature and applications, as well as to present practically useful principles for quantifying the value of various real options. Second, it takes a first step towards extending the real options literature to recognize various interactions with financial flexibility. Overall, the paper illustrates how to practically analyze managerial flexibility in the case of various types of both real as well as financial options, recognizing that these option values may interact.

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Publisher Info
Article provided by Financial Management Association in its journal Financial Management.

Volume (Year): 22 (1993)
Issue (Month): 3 (Fall)
Pages:
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Handle: RePEc:fma:fmanag:trigeorgis

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  1. Matthew Clayton & David Yermack, 1999. "Major League Baseball Player Contracts: An Investigation of the Empirical Properties of Real Options," New York University, Leonard N. Stern School Finance Department Working Paper Seires 99-051, New York University, Leonard N. Stern School of Business-. [Downloadable!]
  2. Quiggin, John, 2008. "Uncertainty and Climate Change Policy," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 38(2), pages 203-210, September. [Downloadable!]
  3. Turvey, Calum, 2002. "Can Hysteresis And Real Options Explain The Farmland Valuation Puzzle?," Working Papers 34131, University of Guelph, Department of Food, Agricultural and Resource Economics. [Downloadable!]
  4. Véronique Bastin & Albert Corhay & Georges Hübner & Pierre-Armand Michel, 2002. "Development path and capital structure of belgian biotechnology firms," Research series 200205-11, National Bank of Belgium. [Downloadable!]
  5. David N. Ford & Diane M. Lander & John J. Voyer, 2002. "A real options approach to valuing strategic flexibility in uncertain construction projects," Construction Management & Economics, Taylor and Francis Journals, vol. 20(4), pages 343-351, June. [Downloadable!] (restricted)
  6. Ulrich Pape & Stephan Schmidt-Tank, 2005. "Valuing Joint Ventures Using Real Options," Finance 0503030, EconWPA. [Downloadable!]
  7. Lint, O., 2000. "Retrospective insights from real options in R&D," ECIS Working Papers 00.09, Eindhoven Centre for Innovation Studies, Eindhoven University of Technology. [Downloadable!]
  8. Onno Lint & Enrico Pennings, 2002. "The option value of developing two product standards simultaneously when the final standard is uncertain," Vlerick Leuven Gent Management School Working Paper Series 2002-10, Vlerick Leuven Gent Management School. [Downloadable!]
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