Corporate Governance: A New Limit to Real Options Valuation?
Philippe, Henri (2005), Corporate Governance: A New Limit to Real Options Valuation?, Journal of Management and Governance, 9, 2, p. 129-149. http://dx.doi.org/10.1007/s10997-005-4028-7
TypeArticle accepté pour publication ou publié
Journal nameJournal of Management and Governance
MetadataShow full item record
Abstract (EN)Including real options in firms ’ value raises numerous difficulties. Limitations concerning the relevance of option pricing models outside financial markets are the most salient, but carrying out a valuation implies other assumptions, especially on firms’ governance. In particular, assessing whether a real option should be included within a firm’s boundaries and how its value should be shared, is difficult. Most of these issues result from the different property rights on real options: who creates and who can exercise the option? We discuss existing answers to these difficulties and propose a matrix based on property rights to help practitioners decide whether a real option can be valued appropriately or not by real options models. We support our discussion with a case study based on an R&D firm valuation.
Subjects / KeywordsTheory of the firm; Real option; R&D; Corporate valuation; Corporate governance; Case studies
Showing items related by title and author.
From online quality valuations to a new division of labor: how platforms transform value creation in the restaurant industry Caillou, Philippe; Casilli, A.; Penalva-Icher, Elise; Posada, J.; Tubaro, Paola (2018) Communication / Conférence