Lecture Week 11A. Real Options and Corporate Strategy.pdf

Lecture Week 11A. Real Options and Corporate Strategy.pdf -...

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1 Options to Defer • Natural Resources extract, cut • Real Estate Development Staged Investments Each stage is an option on the value of the next stage • R&D intensive activities drugs Options to Alter Scale Expand, Contract, Shutdown, Restart Mining Facilities Planning & Construction in cyclical industries Abandonment Options Realize resale value of capital equipment on second-hand markets • Airlines Strategy and Real Options
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