Interfaces for enterprise valuation from a real options lens

Tan, Jackson

doi:10.1002/jsc.2181

Cited by 3 publications

(1 citation statement)

References 45 publications

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“…The development of RO theory rests on a set of key variables intended to describe the endogenous and exogenous factors that affect how an investment opportunity is valued. In identifying the variables encompassed within RO models, companies may formulate strategies, determine business terms, and make decisions on the options that influence volatility in the factors affecting resource value [9].…”

Section: Theoretical Backgroundmentioning

confidence: 99%

A quantitative approach to risk-driven strategy formulation: A case study introducing a real-options framework

Bettanti

Lanati

2022

Front Manage Bus

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The thesis of this article advocates that a quantitative and analytical approach to the business value vs. risk relationship can effectively support company strategy formulation processes dealing with uncertain business scenarios. Within the grounded theory methodology, a suitable case study was selected among SMEs, and a real-options (RO) framework was applied to address the research question. This inductive-empirical methodology shows that the RO framework, in conjunction with the Montecarlo method, is a valuable tool capable of supporting the best strategy formulation by purposefully connecting risk with business value. Furthermore, it has been demonstrated that the RO framework can maximize business value in markets characterized by deep fundamental uncertainty. This article is of interest to both scholars and practitioners. Strategic thinking research can benefit from the conclusions of this paper by conceptually reinforcing strategy formulation theories based on organizational resource-investment choices exploited through the RO lens. Practitioners can verify the strengths of the RO framework in practice. Moreover, they can adopt the combined use of the RO framework and the Montecarlo method as a leading factor for strategy-setting processes and a trigger for shaping strategic risk management practices within their reference industry.

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Section: Theoretical Backgroundmentioning

confidence: 99%

A quantitative approach to risk-driven strategy formulation: A case study introducing a real-options framework

Bettanti

Lanati

2022

Front Manage Bus

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Developing an Industry and Innovation Cluster Strategy Through the Parallel and Sequential Real Options Method

Yashin

Koshelev

Kuptsov

2021

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Subject. This article considers the issues of formation of an innovation and industrial cluster's strategy through the parallel and sequential real options method. Objectives. The article aims to develop an innovation and industrial cluster's strategy formation methodology using parallel and sequential real options. Methods. For the study, we used the compound real options technique. Results. The article presents an original methodology for developing an innovation and industrial cluster's development strategy, taking into account the assessment of the priorities of the cluster itself and the region where it is located. The process of forming a strategy for the development of a pilot cluster of the electric power industry in the Nizhny Novgorod Oblast, represented by PAO TNS Energo NN, is considered as a case study of the implementation of the presented methodology. Conclusions and Relevance. The presented methodology will help further realize the innovative potential available in the region. The results obtained can be useful to public authorities when planning the development of industrial and innovation clusters and the harmonious development of the country's regions.

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The Appraisal of Assets’ Fair Value Using the Real Options Technique

Александр¹

2021

Review of Business and Economics Studies

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The goal of this paper is to analyse and systematise the possible approaches to real options valuation, especially when considering the practical aspects of their application in real-life valuation problems. Therefore, the paper sets the following tasks: To outline the concept of fair value and analyse the traditional approaches to its calculation in the context of asset valuation To define the real-option approach to fair value estimation and analyse its theoretical background To determine the role of the real options approach in the traditional system of valuation techniques To analyse the practical aspects of their application in valuation problems considering the corresponding examples To provide the real-life example of this technique applied in current market conditions using the recent data. The object of this research is the option pricing models, and the subject is their application in estimation of real options embedded in corporate valuations, particularly considering the side.

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Interfaces for enterprise valuation from a real options lens

Cited by 3 publications

References 45 publications

A quantitative approach to risk-driven strategy formulation: A case study introducing a real-options framework

A quantitative approach to risk-driven strategy formulation: A case study introducing a real-options framework

Developing an Industry and Innovation Cluster Strategy Through the Parallel and Sequential Real Options Method

The Appraisal of Assets’ Fair Value Using the Real Options Technique

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