This revised edition of the highly successful book, Real Options, offers corporate decision-makers the ability to assess the profitability of their ventures and decide which avenue of expansion or investment to go down and, crucially, when to take that leap. The reader goes on a journey through real options, from the basics to more advanced topics such as options and game theory. It provides expert guidance on how to implement the theory to maximize investment opportunities by utilizing uncertainty as an asset and reducing downside risk.
Ch.1 Getting Started
Ch.2 The Change Process
Ch.3 Net Present Value
Ch.4 Comparing Net Present Value, Decision Trees, and Real Options
Ch.5 Numerical Methods for Simple Options
Ch.6 Compound and Switching Options
Ch.7 Going from One Step per Time Period to Many
Ch.8 A Four-Step Process for Valuing Real Options
Ch.9 Estimating Volatility: Consolidated Approach
Ch.10 Keeping Uncertainties Separate
Ch.11 Case Examples
Ch.12 Final Thoughts