Real Options
Evaluating Corporate
Investment Opportunities in a Dynamic World
Real option analysis is a
development from the methods by which financial markets value an option on a stock or
share. It helps us decide how much money we should spend to acquire an economic
opportunity and when we should commit ourselves to one of the available decisions. Real
option analysis is increasingly being used by companies to value intangible assets.
However, due to the mathematical complexity of analyzing real options, they are only now
becoming essential to corporate strategy.
Real Options will provide the
reader with a comprehensive understanding of the concepts behind real option analysis and
how to use them. It demystifies the scientific aura surrounding the subject, giving the
reader the understanding necessary to direct or apply real option analysis in any
organizational setting.
Real Options will:
-
introduce real options, what they are, why they are important and when to use them
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explain the essential concepts of real and financial option analysis
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illustrate how to apply financial option concepts to real options
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explain how to build and solve real option models
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highlight the limitations and pitfalls of real option analysis
-
provide foresight into the future of real option analysis
- provide
worked practical examples and case studies from the world of real estate, sport
management, power generation and operations.
Written by a team of authors
from (and linked) to Manchester Business School who have experience in teaching
practitioners and students alike in the field of real options, this book will guide the
reader from a basic level through to more advanced analysis
Real Options will prove
essential reading for finance practitioners, finance consultants, MBA and finance
students, and general managers.
Sydney Howell is a Senior
Lecturer in Management Accounting and Control at Manchester Business School. He has over
20 years experience as a teacher, manager and consultant in all areas of real options, and
has taught for many companies including IBM, Tesco and C&A.
Andrew Stark is Professor of
Accounting at Manchester Business School, and is presently Director of the Manchester MBA
programme. He is a well-known contributor to conferences on real options and has taught at
Maryland, Yale and Manchester universities.
David Newton is Lecturer in
Accounting and Finance at Manchester Business School, and has a wide-ranging expertise in
teaching real options theory and practice to students and practitioners alike. He wrote a
seminal paper on the application of options theory to R&D.
Dean Paxson is Professor of
Finance and Accounting at Manchester Business School where he has taught real options to
MBAs for several years. He was educated at Amherst College, Oxford and Harvard Business
School, and has written a number of well-received books on real options.
Mustafa Cavus is a senior
consultant with Capstone Energy Consulting, and specializes, among other fields, in
options and futures in electricity generation. Mustafa holds Master's degrees from German
and British universities, as well as a PhD from Manchester Business School
Joee Antonio de
Azevedo-PereIra is a graduate of ISEG (Technical University of Lisbon) and Manchester
Business School. He is presently Professor Auxiliar at ISEG and has previously held a
number of Board and Executive positions in Portuguese companies.
Kanak Patel is Lecturer in
Property Finance at the Department of Land Economy, University of Cambridge. Initially a
risk analyst at Lloyd's of London, she has also taught finance at Manchester Business
School and at the Management School, Imperial College, University of London.
308 pages