Book Display

A Stochastic Control Framework for Real Options in Strategic Valuation
ISBN: 0817642587     Date Published: 2002-12-13     Author(s): Alexander Vollert
  Average Customer Rating:Stars Rating  
 

Your Price: $124.00      Retail: $124.00      Save: $      Benifit - % Off  
$124.00
Book Image
Hardcover
Birkhäuser Boston
288 Pages
 
Prices subject to change.
Last Update:
06/20/2013 01:34:17
Buy Book
Return to Book Index  
Editorial Review - Book Description:
The theoretical foundations for real options goes back to the mid 1980s and the development of a model that forms the basis for many current applications of real option theory. Over the last decade the theory has rapidly expanded and become enriched thanks to increasing research activity. Modern real option theory may be used for the valuation of entire companies as well as for particular investment projects in the presence of uncertainty. As such, the theory of real options can serve as a tool for more practically oriented decision-making providing management with strategies maximizing its capital market value. The book unfolds and examines a new framework for classifying real options from a management as well as a valuation perspective, giving the advantages and disadvantages of the real option approach. Impulse control theory and the theory of optimal stopping combined with methods of mathematical finance are used to construct arbitrarily complex real option models which can be solved numerically and yield optimal capital market strategies and values. Various examples are given demonstrating the potential of the proposed framework.

Book Info
The book unfolds and examines a new framework for classifying real options from a management as well as a valuation perspective, giving the advantages and disadvantages of the real option approach. Various examples are given demonstrating the potential of the proposed framework.
 
Customer Review:
Total Reviews: (1)
  (0)      (0)      (1)      (0)      (0)
(1) Shared
 
5 of 5 People found the following review helpful.

Some great insights, but hard to read, January 10, 2005 ByPatrick L. Anderson (Michigan USA) - See all my reviews This review is from: A Stochastic Control Framework for Real Options in Strategic Valuation (Hardcover) Vollert's book contains many great insights, but most readers will find this very tough going, indeed. The strength of this book is its rigorous taxonomy of real options and stochastic processes, extensive bibliography, and criticism of naive DCF models. However, the reader will need extensive mathematical background and already understand much of what is contained here. Motivated and mathematically able readers may want to consider Dixit and Pindyck's classic Investment Under Uncertainty, or a recent compendium like that of Smit and Trigerois. Those interested in a less intensive, but still rigorous, overview should consider Anderson's Business Economics and Finance [my book]. Those interested in just applying some real options analysis could choose from many books, including the Mun book. Note that many of these, however, are full of black-box thinking that can result in ridiculous results. Vollert's book, while difficult, at least avoids this error.
 
Buy Book