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1. Explain the use of strategic option in valuation. Explain how strategic options are often abused in valuation. 2. Explain the APV approach and how

1. Explain the use of strategic option in valuation. Explain how strategic options are often abused in valuation.

2. Explain the APV approach and how it is used in enterprise valuation.

3. Explain how derivative securities are used to find certainty equivalent cash flows. How would you use these cash flows in valuation?

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1 The strategic options would have intrinsic value and this value can be realized if the management decided to execute the strategy This theory is based on the principle of maximization of shareholder... blur-text-image

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