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Essay's paper info
Topic: |
Business
|
Number of pages / Number of words: |
27 / 7528 |
Essay's paper body
It captures tbe
contingencies of real options and addresses nearly all of
90 HARVARD BUSINESS REVIEW
Manage Real Options
Real options don't have to
be a black box. Here's an
approach that not only
the math of options
tbe most commonly voiced criticisms
of using option tbeory to
manage tbose contingencies...
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aOOUt exerClSmg t h e m .
Much ofthe gap between the theoretical
and realized values of companies'growtb projects
may be tbe result of a disconnect between tbe way managers
value options and tbe way they manage them-a
problem tbat, incidentally, applies to both real and financial
options.
In calculating real-option values, most managers, academics,
and consultants assume that option bolders will
always make optimal exercise decisions-timely cboices
based on rational analyses of all tbe available information...
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