Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Chapter 22, Problem 6PS
Summary Introduction

To discuss: The reasons on quantitative valuation of real options usually difficult for practising.

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In a qualitative analysis, what factors affect the value of a real option?
"Financial Derivative and Risk Management" Why are the probabilities of stock price movements not used in the Binomial Option Pricing Model for calculating an option's price? What variables are used? Explain in detail with an example.
What’s the difference between a financial optionand a real option? What are some specific typesof real options? Do real options just occur, or canthey be “created”?
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