Publicação
Costly reversible disinvestment option in a valuation of renewable energy case
| Resumo: | The necessity to improve the company valuation techniques considering the relevant factors of the market and the flexibility of change investment positions during the period lead academics search for new valuation techniques. Also, investors interested in analyzing the financial information to know before invest at the project when he will reimbursed for profits and if the project goes wrong how much is the value of the investment. In this context real options valuation raises as a concept imported from financial markets to evaluate projects and companies as can incorporate the fluctuations of the market and decisions defined by the investor. Santos "et al." (2014) presented a case of renewable energy on a mini-hydro plant where evaluates the project both with traditional methods and real options studding the ability to defer the entry in the project until 5 years. Despite being a surplus to present the two valuation methods, the real options valuation analyzed is quite limited. This project intends to demonstrate that the application of real options with flexibility at disinvestment decision leads to a more accurate decision. To accomplish this purpose, we will revisit the same base case but including dividends and an option to disinvest during the life of the project in a costly reversible situation with the binomial model. |
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| Autores principais: | Rino, Diogo Correia |
| Assunto: | Real options Flexibility Costly reversibility Binomial model Finanças Avaliação de empresas Investimento financeiro Opções reais Análise de decisão Modelo binomial |
| Ano: | 2017 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | ISCTE |
| Idioma: | inglês |
| Origem: | Repositório ISCTE |
| Resumo: | The necessity to improve the company valuation techniques considering the relevant factors of the market and the flexibility of change investment positions during the period lead academics search for new valuation techniques. Also, investors interested in analyzing the financial information to know before invest at the project when he will reimbursed for profits and if the project goes wrong how much is the value of the investment. In this context real options valuation raises as a concept imported from financial markets to evaluate projects and companies as can incorporate the fluctuations of the market and decisions defined by the investor. Santos "et al." (2014) presented a case of renewable energy on a mini-hydro plant where evaluates the project both with traditional methods and real options studding the ability to defer the entry in the project until 5 years. Despite being a surplus to present the two valuation methods, the real options valuation analyzed is quite limited. This project intends to demonstrate that the application of real options with flexibility at disinvestment decision leads to a more accurate decision. To accomplish this purpose, we will revisit the same base case but including dividends and an option to disinvest during the life of the project in a costly reversible situation with the binomial model. |
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