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What is Real Options Valuation Models Explained about?

This document discusses modeling choices in real option valuation models. It analyzes four models: the Black-Scholes formula, binomial model from the 1970s, and the more recent Datar-Mathews method and Fuzzy Pay-off Method. The key components of modeling option valuation are: 1) modeling the distribution of future values, 2) calculating the expected value of the distribution while setting negative values to zero, and 3) discounting the expected value to the present. The models make different choices in how

Author

Fernanda Rodrigues

Language

EN