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Real Options Analysis: Tools and Techniques for Valuing Strategic Investments and Decisions
Cutting-edge information on the valuation and application of real options
Most investors and risk managers are familiar with financial options. But the real option structure is embedded in billions of dollars of stocks traded every day, and in billions of dollars of strategic or investment decisions made by many companies. Real options are a useful tool to guide a firm's strategic planning, and can create or enhance a firm's value.
Real Options Analysis provides a revolutionary approach to evaluating and valuing capital investment strategies by taking into consideration the real options inherent in the strategic decision-making process. This book provides readers with a qualitative and quantitative description of real options, the methods used in solving real options, why and when they are used, and the applicability of these methods in decision-making. In addition, multiple business cases and real-life scenarios are discussed. This includes presenting and framing the problems, as well as the introduction of a stepwise quantitative process developed by the author for solving these problems using the different methodologies inherent in real options-with the assistance of Real Options software powered by Crystal Ball(TM), which is included on the companion CD-ROM. With technical presentations of models and approaches backed by theoretical and mathematical justifications, Real Options Analysis is one of the most comprehensive guides available on real options.
Most investors and risk managers are familiar with financial options. But the real option structure is embedded in billions of dollars of stocks traded every day, and in billions of dollars of strategic or investment decisions made by many companies. Real options are a useful tool to guide a firm's strategic planning, and can create or enhance a firm's value.
Real Options Analysis provides a revolutionary approach to evaluating and valuing capital investment strategies by taking into consideration the real options inherent in the strategic decision-making process. This book provides readers with a qualitative and quantitative description of real options, the methods used in solving real options, why and when they are used, and the applicability of these methods in decision-making. In addition, multiple business cases and real-life scenarios are discussed. This includes presenting and framing the problems, as well as the introduction of a stepwise quantitative process developed by the author for solving these problems using the different methodologies inherent in real options-with the assistance of Real Options software powered by Crystal Ball(TM), which is included on the companion CD-ROM. With technical presentations of models and approaches backed by theoretical and mathematical justifications, Real Options Analysis is one of the most comprehensive guides available on real options.
- GenresFinance
416 pages, Hardcover
First published September 20, 2002
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Displaying 1 - 3 of 3 reviews
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January 2, 2020I did not realize when I first got this book that this book was about corporate use of options. However, that is not such a bad place to ground options theory. Munn is obviously keen about his software and some of this needs to be taken with a grain of salt, since, most of this can be built in house with a bit of effort.
That said, it is a great book for those that are interested in options within both a corporate and financial sense. The book does a decent job going through binomial trees and black scholes. I also like Appendix 9A which lists out clearly all the different variations on option strategies.
It speeds through the greeks, but it's helpful to see the math on all of them laid out as in Appendix 7E.
That said, it is a great book for those that are interested in options within both a corporate and financial sense. The book does a decent job going through binomial trees and black scholes. I also like Appendix 9A which lists out clearly all the different variations on option strategies.
It speeds through the greeks, but it's helpful to see the math on all of them laid out as in Appendix 7E.
January 9, 2015
It is a disappointing reading and I eventually gave up. If you have some mathematics background and want to purchase and use the author's softwares for fun, the book is a good guidance and textbook. That's it.
I expected something which can explain to business people how to calculate the value and consider it with the value from traditional valuation methodologies. Most examples are high level, qualitative and back looking (justify the result using real option)
Frankly it's not an issue of this book. It's an issue of the whole concept of real option which is still mostly in the textbook and seldom used by real business and financial world quantitatively. It's no problem for the MBA graduated CEOs to accept the concept and incorporate in the business development and strategy making process, but how comfortable are they to actually rely on and trust the numbers they are presented?
I expected something which can explain to business people how to calculate the value and consider it with the value from traditional valuation methodologies. Most examples are high level, qualitative and back looking (justify the result using real option)
Frankly it's not an issue of this book. It's an issue of the whole concept of real option which is still mostly in the textbook and seldom used by real business and financial world quantitatively. It's no problem for the MBA graduated CEOs to accept the concept and incorporate in the business development and strategy making process, but how comfortable are they to actually rely on and trust the numbers they are presented?
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March 10, 2019this book inspirated me for my MA thesis
Displaying 1 - 3 of 3 reviews