Application of Real Option Method in Firm Valuation—A Case Study on Microchip

Finance ◽  
2021 ◽  
Vol 11 (04) ◽  
pp. 399-410
Author(s):  
琪 韩
Keyword(s):  
Real Option ◽  
Firm Valuation ◽  
Real Option Method

Valuation of a Troubled Firm: A Case Study on Jet Airways

2014 ◽  
Vol 1 (2) ◽  
Author(s):  
Anjala Kalsie
Keyword(s):  
Real Option ◽  
Market Price ◽  
Discounted Cash Flow ◽  
Book Value ◽  
The Real ◽  
Real Option Approach ◽  
Indian Firm ◽  
Real Option Method ◽  
Discounted Cash Flow Method

The objective in the paper is to value a firm in distress which is struggling to survive and continue its operations, unable to meet its debt obligations, and making losses so that it has a negative book value. The paper has taken a listed Indian firm which is in operation since a decade called Jet Airways. The paper looks at different methods to value this company, the most prominent being the real option approach to valuation. Finally, a comparison of different valuation methods was done with the real company price. The Discounted Cash Flow method tends to overvalue the price of a distressed firm. Real option method gives us a much smaller intrinsic price which is even close to the market price of the share.

Research on the Real Options in Investment Decision of Waterway Infrastructure Construction

2013 ◽  
Vol 734-737 ◽  
pp. 1617-1620
Author(s):  
Wei Jin
Keyword(s):  
Real Options ◽  
Carbon Dioxide Emissions ◽  
Capital Investment ◽  
Real Option ◽  
Investment Decision ◽  
Energy Utilization ◽  
Real Options Theory ◽  
The Real ◽  
The Government ◽  
Real Option Method

Developing the waterway infrastructure construction can improve the efficiency of energy utilization, reduce the energy consumption intensity and carbon dioxide emissions. Till the year 2020, China plan to complete 19,000 kilometers high grade channel. Construction of water infrastructure construction requires a large capital investment. However, the main financial source of funding the construction of transportation infrastructure at present in China is special financial allocation of the government. The unitary financing structure as well as the funding pressure has leaded to some serious financing problems. This paper applied the real options theory to the waterway infrastructure construction financing, analyzed the limitations of the NPV method and the advantages of real option method in investment decision of waterway infrastructure construction, and took an example to show its feasibility.

Deep energy renovation strategies: A real option approach for add-ons in a social housing case study

2018 ◽  
Vol 161 ◽  
pp. 1-9 ◽  
Author(s):  
Elettra Agliardi ◽  
Elena Cattani ◽  
Annarita Ferrante
Keyword(s):  
Social Housing ◽  
Real Option ◽  
Real Option Approach

scholarly journals Evaluating CCS Investment of China by a Novel Real Option-Based Model

2016 ◽  
Vol 2016 ◽  
pp. 1-15 ◽  
Author(s):  
Hongrui Chu ◽  
Lun Ran ◽  
Ran Zhang
Keyword(s):  
Carbon Capture ◽  
Real Option ◽  
Thermal Power ◽  
Carbon Capture And Storage ◽  
Carbon Price ◽  
Coal Price ◽  
Thermal Coal ◽  
Robust Least Squares ◽  
And Storage

Carbon capture and storage (CCS) technology is an effective method to mitigate CO2 emission pressure; however it is hard to be evaluated due to uncertainties. This paper establishes a real options analysis (ROA) model to evaluate CCS investment from the perspective of the existing thermal power plant by considering the fluctuations of electricity price, carbon price, and thermal coal price. The model is solved by the proposed robust Least Squares Monte Carlo method and China is taken as a case study to assess power plant’s CCS investment revenue. In the case study, robust ROA and ROA are compared under some CCS incentive factors. The results indicate that the proposed robust ROA is more realistic and suitable for CCS evaluation than common ROA to some extent. Finally, a policy schema to promote CCS investment is derived.

scholarly journals Real-Option Valuation in Multiple Dimensions Using Poisson Optional Stopping Times

2019 ◽  
Vol 55 (2) ◽  
pp. 653-677 ◽  
Author(s):  
Rutger-Jan Lange ◽  
Daniel Ralph ◽  
Kristian Støre
Keyword(s):  
Real Option ◽  
Value Function ◽  
Stopping Times ◽  
Monotone Sequence ◽  
Option Valuation ◽  
Real Option Valuation ◽  
Multiple Dimensions ◽  
Optional Stopping ◽  
New Framework

We provide a new framework for valuing multidimensional real options where opportunities to exercise the option are generated by an exogenous Poisson process, which can be viewed as a liquidity constraint on decision times. This approach, which we call the Poisson optional stopping times (POST) method, finds the value function as a monotone sequence of lower bounds. In a case study, we demonstrate that the frequently used quasi-analytic method yields a suboptimal policy and an inaccurate value function. The proposed method is demonstrably correct, straightforward to implement, reliable in computation, and broadly applicable in analyzing multidimensional option-valuation problems.

VIRTUAL ARRIVAL: A REAL OPTION FOR ENERGY SAVING

2021 ◽  
Vol 155 (A4) ◽  
Author(s):  
V Capurso ◽  
M Ferrando ◽  
P Gualeni ◽  
M Viviani
Keyword(s):  
Energy Saving ◽  
Real Option

Here is timely guidance for the ship operator when considering a strategy to avoid port delays. The case study also offers a commendably comprehensive template for those examining a specific ship and route.

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