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1. Valuing real options Aa Aa Real options give the holder the right, but not the obligation, to undertake business dedisions-typically those that involve capital

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1. Valuing real options Aa Aa Real options give the holder the right, but not the obligation, to undertake business dedisions-typically those that involve capital investments. which of the following examples of assets are involved in the valuation of real aptions? O Property, plant, and equipment O Stocks and bands The presence of managerial, or real, options the value of an investment project. Increase5 Different methods are used to look for real options and valuing them. The following table lists five possible methods. Select their order of simplicity with 1 being the most simple procedure and 5 being the most difficuit procedure. Technique Use a standard model for a financial option. Use decision-treeanalysis Use discounted cash flow valuation and include a qualitative recognition ofany real option's value. Develop a unique, project-spedific model by using financial engineering techniques. Use discounted cash flow valuation and ignore any options by assuming their values are zero. real

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