Explores real option theory applied in practice
Real options are quickly becoming the valuation and decision-making method of choice for many companies, including oil and gas companies, utilities and natural resource companies, pharmaceutical and biotech companies, Internet companies, and many others.
Real Options in Practice allows readers to view the world of real options from the vantage point of a corporate practitioner applying real option valuation techniques on a regular basis. Expert Marion Brach describes the challenges of implementing a real option framework in practice within a corporate setting. Touching on the real options most firms care about, Real Options in Practice identifies the classic types of real options-deferral, abandonment, switching, expansion, and compound-and explores the main concepts critical to understanding real option theory. Through Brach's own three-step real option valuation method readers will learn how the theory of real options is now being applied to drive better, more profitable corporate decision-making.
For the investor, this value of this book about the analysis of non-financial options is what it says about the limitations of conventional investigations of future financial events. For thoughtful folks not concerned about figuring out the price of a financial options, Dr. Brach provides a glimpse of analysis as it will likely be in a decade or two. This reviewer cannot recommend this book too highly. For a reader with a little calculus and some statistics, it's not hard reading. For anyone, it is an adventure with a very bright mind