Real Options Analysis: Tools and Techniques, 2nd Edition (Wiley, 2005)

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• May 27, 2015
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Real Options Analysis (Second Edition) provides a novel view of evaluating capital investment strategies by taking into consideration the strategic decision-making process. The book provides a qualitative and quantitative description of real options, the methods used in solving real options, why and when they are used, and the applicability of these methods in decision making.

In addition, multiple business cases and real-life applications are discussed. This includes presenting and framing the real options problems, as well as introducing a stepwise quantitative process developed by the author for solving these problems using the different methodologies inherent in real options. Included are technical presentations of models and approaches used as well as their theoretical and mathematical justifications. The book is divided into three parts: the qualitative discussions of real options; the quantitative analysis and mathematical concepts; and practical applications.

The first part looks at the qualitative nature of real options, providing actual business cases and scenarios of real options in the industry, as well as high-level explanations of how real options provide the much-needed insights in decision making.

The second part of the book looks at the step-by-step quantitative analysis, complete with worked-out examples and mathematical formulae.

The third part illustrates the use of the Real Options Valuation’s Super Lattice Solver software and Risk Simulator software both developed by the author and included in the enclosed CD-ROM (standard 30-day trial with extended academic license). In this section, more detailed business cases are solved using the software…read more