Real Option Models in Valuation

ABOUT THIS CONTENT

In this section, you will find models to value both a patent (and a firm owning a patent) as an option, natural resource firms and equity in deeply troubled firms.

Spreadsheets included:
• equity.xls - A model that uses option pricing to value the equity in a firm; best suited for highly levered firms in trouble.

• natres.xls - A model that uses option pricing to value a natural resource company; useful for valuing oil or mining companies.

• project.xls - A model that uses option pricing to value a product patent or option; useful for valuing the patents that a company might hold.