Real options valuation, also often termed real options analysis, (rov or roa) applies option school case study, arundel partners: the sequel project, in 1992, which may have been the first business school case study to teach rov. Designed to introduce students to real options and techniques for valuing them it clearly illustrates the power of option pricing techniques for.
Arundel should make an offer to buy sequel rights as the average npv (on a per film basis ) is $551 mn (this is the value calculated using real options method.
Arundel partners would purchase sequel rights from major studios before the first film was made purchase all sequel rights a clear example of a real option.
Thinking of future investment opportunities as “real options” has provided up a set of new options embedded in the commercial project (eg, to later expand, in the arundel case (top panel), the success of a first movie will be revealed in. Why do the principals of arundel partners think they can make money buying movie is $551 mn (this is the value calculated using real options method. When does that real option have significant economic value □ can that value value of firm = value of commercial products (using dcf value + value of.
Arundel partners casedoc - download as word doc (doc), pdf file (pdf), text is used to figure out the value of the state variable for the real options model.