Real Options In Capital Investment / Edition 1

Real Options In Capital Investment / Edition 1

by Lenos Trigeorgis
     
 

ISBN-10: 0275946169

ISBN-13: 9780275946166

Pub. Date: 09/05/2000

Publisher: ABC-CLIO, Incorporated

This compilation integrates various new contributions to the growing real options literature. Recent developments in the valuation of capital investment opportunities seen as real options (e.g. to defer, expand, abandon, or switch) have provided the tools and unlocked the possibilities to revolutionize the field of capital budgeting. The resulting insights, strategies

Overview

This compilation integrates various new contributions to the growing real options literature. Recent developments in the valuation of capital investment opportunities seen as real options (e.g. to defer, expand, abandon, or switch) have provided the tools and unlocked the possibilities to revolutionize the field of capital budgeting. The resulting insights, strategies, and techniques enable quantifying the thus far elusive elements of managerial operating flexibility and strategic interactions. These are vital to successfully capitalize on favorable future investment opportunities or limit losses from adverse market developments. This book presents various models and operating strategies, and a variety of applications ranging from acquisitions and divestitures, to natural resource development and pollution compliance. It is intended for both the academic and the professional market.The book's contributions are divided into five parts, covering sections on real options and alternative valuation paradigms for capital investment analysis; on the analysis of general exchange or switching options, and interdependencies among multiple such options; on strategic acquisitions, infrastructure, and foreign investment options; on mean reversion/ alternative formulations in natural resource investments, shipping, and start-up ventures; and on other applications in pollution compliance, land development, flexible manufacturing, and financial default options. Both academic and practitioner interest in these developments is unusually high. The book can serve as supplementary material for the academic market, e.g., in advanced finance courses in option pricing or capital budgeting, in doctoral seminars, and as a library resource. It may also be of interest to the professional market (e.g. corporate planners and finance executives in the oil, pharmaceutical, auto and a variety of other industries), academics from related areas (e.g. decision analysts or economists), as well as to international readers (academics, doctoral students, and professionals).

Product Details

ISBN-13:
9780275946166
Publisher:
ABC-CLIO, Incorporated
Publication date:
09/05/2000
Edition description:
New Edition
Pages:
384
Product dimensions:
6.00(w) x 9.00(h) x 1.00(d)
Lexile:
1580L (what's this?)

Table of Contents

Preface

Real Options: An Overview by Lenos Trigeorgis

Real Options and Alternative Valuation Paradigms

Methods for Evaluating Capital Investment Decisions under Uncertainty by Elizabeth Olmsted Teisberg

Merging Finance Theory and Decision Analysis by Eero Kasanen and Lenos Trigeorgis

The Strategic Capital Budgeting Process: A Review of Theories and Practice by Van Son Lai and Lenos Trigeorgis

General Exchange or Switching Options and Option Interdependencies

The Value of Flexibility: A General Model of Real Options by Nalin Kulatilaka

The Valuation of American Exchange Options with Application to Real Options by Peter Carr

Operating Flexibilities in Capital Budgeting: Substitutability and Complementarity in Real Options by Nalin Kulatilaka

Strategy, Infrastructure, and Foreign Investment Options

The Value of Options in Strategic Acquisitions by Kenneth W. Smith and Alexander J. Triantis

Corporate Governance, Long-term Investment Orientation, and Real Options in Japan by Takato Hiraki

Volatile Exchange Rates and the Multinational Firm: Entry, Exit, and Capacity Options by Gregory K. Bell

Mean Reversion/Alternative Formulations in Natural Resources, Shipping, and Start-Up Ventures

The Effects of Reversion on Commodity Projects of Different Length by David G. Laughton and Henry D. Jacoby

Contingent Claims Evaluation of Mean-Reverting Cash Flows in Shipping by Petter Bjerksund and Steinar Ekern

Valuing Start-up Venture Growth Options by Ram Willner

Other Applications in Pollution Compliance, Land Development, Flexible Manufacturing, and Financial Default

Investment in Pollution Compliance Options: The Case of Georgia Power by Michael E. Edleson and Forest L. Reinhardt

Optimal Land Development by Laura Quigg

Multiproduct Manufacturing with Stochastic Input Prices and Output Yield Uncertainty by Bardia Kamrad and Ricardo Ernst

Default Risk in the Contingent Claims Model of Debt by Anne Fremault Vila and Martha Amram Schary

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