Research output: Working paper
Research output: Working paper
}
TY - UNPB
T1 - When can pessimism add value? How real option disinvestment flexibility augments project NPV
AU - Keswani, A
AU - Shackleton, M B
PY - 2002
Y1 - 2002
N2 - In this article by drawing together existing option pricing models we demonstrate how different degrees of managerial flexability can affect the value of a project. In particular we also include new option pricing results that allow us to properly take into account a firms exit option. Our paper illustrates that these disinvestment options can be valuable suggesting that managerial pessimism (i.e. consideration of outcomes if the project does not perform) can add value.
AB - In this article by drawing together existing option pricing models we demonstrate how different degrees of managerial flexability can affect the value of a project. In particular we also include new option pricing results that allow us to properly take into account a firms exit option. Our paper illustrates that these disinvestment options can be valuable suggesting that managerial pessimism (i.e. consideration of outcomes if the project does not perform) can add value.
M3 - Working paper
T3 - Accounting and Finance Working Paper Series
BT - When can pessimism add value? How real option disinvestment flexibility augments project NPV
PB - The Department of Accounting and Finance
CY - Lancaster University
ER -