IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

Profitability, balance sheet data, real options and the valuation of equity

Registered author(s):

    We illustrate the impact that real options generally available to firms can have on the value of corporate equity, and in particular the valuation errors that are likely to arise from ignoring them. Moreover, we develop real option values in terms of the profitability and balance sheet (bookkeeping) measures that appear on published corporate financial statements. Our analysis is conducted in terms of two of the more generally understood real options available to firms; namely, the option to liquidate (or abandon) a firm’s current productive activities and the option to implement (or delay) the unexploited but potentially profitable capital projects that are available to it.

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Article provided by Capco Institute in its journal Journal of Financial Transformation.

    Volume (Year): 22 (2008)
    Issue (Month): ()
    Pages: 195-201

    in new window

    Handle: RePEc:ris:jofitr:0846
    Contact details of provider: Postal: 120 Broadway, 29th Floor New York, NY 10271
    Phone: +1 212 284 8600
    Web page:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ris:jofitr:0846. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Springett)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.