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The real options application for firm valuation

Author

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  • Hana Scholleová

Abstract

Real options as a right of future decision making based on additional information from company external are possible to find everywhere, all of the firms have the flexibility. The flexibility value is result of the DCF methods, but it is necessary calculate also with flexibility value. For its utilizing some selection is needful as the work with real options could bring more use then expense. The first grade of selection is not care for decision at certainty or at risk with zero volatility, where option value is close to zero. The real options give the some answer as classical methods of DCF in case when the decisions making can not be defer Real options are not a new method, but they only enlarge the scale of classical methods, they give possibility to evaluate the firm opportunities.

Suggested Citation

  • Hana Scholleová, 2008. "The real options application for firm valuation," Ekonomika a Management, University of Economics, Prague, vol. 2008(1).
  • Handle: RePEc:prg:jnleam:v:2008:y:2008:i:1:id:16
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    References listed on IDEAS

    as
    1. Dinwiddy,Caroline L. & Teal,Francis J., 1996. "Principles of Cost-Benefit Analysis for Developing Countries," Cambridge Books, Cambridge University Press, number 9780521479165, December.
    2. Elio H. Londero, 2003. "Shadow Prices for Project Appraisal," Books, Edward Elgar Publishing, number 3064, April.
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    More about this item

    Keywords

    Flexibilita; Flexibility; Reálné opce; Real options; Oceňování podniku; Firm valuation;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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