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Brealey, Myers, and Allen on Real Options


  • Richard A. Brealey
  • Stewart C. Myers
  • Franklin Allen


Real options are valuable sources of flexibility that are either inherent in, or can be built into, corporate assets. The value of such options are generally not captured by the standard discounted cash flow (DCF) approach, but can be estimated using a variant of financial option pricing techniques. Copyright (c) 2008 Morgan Stanley.

Suggested Citation

  • Richard A. Brealey & Stewart C. Myers & Franklin Allen, 2008. "Brealey, Myers, and Allen on Real Options," Journal of Applied Corporate Finance, Morgan Stanley, vol. 20(4), pages 58-71.
  • Handle: RePEc:bla:jacrfn:v:20:y:2008:i:4:p:58-71

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    References listed on IDEAS

    1. Martha Amram & Fanfu Li & Cheryl A. Perkins, 2006. "How Kimberly-Clark Uses Real Options," Journal of Applied Corporate Finance, Morgan Stanley, vol. 18(2), pages 40-47.
    2. Brennan, Michael J & Schwartz, Eduardo S, 1985. "Evaluating Natural Resource Investments," The Journal of Business, University of Chicago Press, vol. 58(2), pages 135-157, April.
    3. Robert L. McDonald, 2006. "The Role of Real Options in Capital Budgeting: Theory and Practice-super-1," Journal of Applied Corporate Finance, Morgan Stanley, vol. 18(2), pages 28-39.
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