1. When Valuation Considers 'Real Options.'
- Author
-
Levinsohn, Alan
- Subjects
- *
REAL options (Finance) , *CORPORATE finance , *DISCOUNTED cash flow , *NET present value , *VALUATION , *SMALL business finance , *VALUATION of corporations , *BUSINESS valuation - Abstract
The article discusses real options analysis for valuations of corporate finances. The article comments that the discounted-cash-flow (DCF) approach and the net-present-value (NPV) method undervalue assets and potential projects. The benefits of using real options analysis when considering small, potentially high growth companies and any internal company project is discussed. Resources for real options analysis are provided.
- Published
- 2001