Does the Market Correctly Value Investment Options?*
نویسندگان
چکیده
منابع مشابه
Corporate Investment Decisions and the Value of Growth Options
Recent applications of real options theory in strategy research have examined investment decisions framed as the purchase or exercise of particular options, but research has yet to offer direct evidence on whether firms actually capture option value from such investments. In this paper, we estimate the proportion of firm value accounted for by growth options and link the growth option value to ...
متن کاملOptions , the Value of Capital , and Investment by Andrew
Capital investment decisions must recognize the limitations on the firm's ability to later sell off or expand capacity. This paper shows how opportunities for future expansion or contraction can be valued as options, how this valuation relates to the q-theory of investment, and how these options affect the incentive to invest. Generally, the option to expand reduces the incentive to invest, whi...
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A growing body of research offers evidence that CEOs and other top executives show large and persistent person-specific heterogeneity in their management styles. Bertrand and Schoar (2003) document that such person-specific styles explain a substantial fraction of the variation in firms’ capital structures, investment decisions and organizational structures. The idea that CEOs greatly differ in...
متن کاملDoes the market matter for more than investment?
Article history: Received 11 May 2012 Received in revised form 17 July 2013 Accepted 8 November 2013 Available online 18 November 2013 Market effects on corporate investment are well documented. Low disagreement implies high investment, but we know little about what high disagreement implies, other than the implied flip side (low investment). This paper adds to this literature in several ways. ...
متن کاملWhere does the investment value of target prices come from?
Equity analysts’ target price can be decomposed into two components: the earnings forecast and the price-to-earnings (P/E) ratio forecast, with the former containing shortterm earnings news and the latter containing news about long-term earnings growth and discount rates. Using a large database of target prices from 1997 to 2004, we document that both components are important in driving target ...
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ژورنال
عنوان ژورنال: Review of Finance
سال: 2020
ISSN: 1572-3097,1573-692X
DOI: 10.1093/rof/rfaa002