Corporate Valuation. Massari Mario

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СКАЧАТЬ results. In such a case, the highest probable expected output is the average output. Quite often, though, prospective results are mutually exclusive, thus making expected “average” results unlikely. The very idea of average thus loses its significance.

2

Irving Fisher, The Rate of Interest (New York: Macmillan 1907) and The Theory of Interest (New York: Macmillan 1930).

3

It's well known that the different phases of the life cycles of firms and industries are characterized by different levels of uncertainty. Scholars are of the opinion that there exists a stable and demonstrated relationship among the risk profile type of industry and life cycle of the very same industry. In the initial phases of the cycle (so-called “introduction” and “development”), the risks are particularly elevated, with the consequent possibility of huge losses of invested capital. In general, in the innovative sectors uncertainty and the difficulty of forecasting are well-known risk factors.

4

The most widely used models are the Porter five forces – Michael Porter, Competitive Strategy (New York: The Free Press, 1980) – and the strategies and competitive advantages matrices – M. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: The Free Press, 1985).

5

With asymmetric probability distributions, the most likely scenario is different from the expected scenario.

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For introductory reading on applications of real options in capital budgeting and investment policies, see Chapters 1 and 2 of A. Dixit, R. Pindyck, Investments under Uncertainty (Princeton, NJ: Princeton University Press, 1994), and W. C. Kester, “Today's Options for Tomorrow's Growth,” Harvard Business Review, 60 (1984): 153–160. For an in-depth presentation of the real option applications, see L. Trigeorgis, E. S. Schwartz, Real Options and Investment under Uncertainty: Classical Readings and Recent Contributions (Cambridge: The MIT Press, 2001); N. Kulatilaka, M. Amram, Real Option: Managing Strategic Investment in an Uncertain World (Boston: Harvard Business School Press, 1999); T. Copeland, V. Antikarov, Real Options: a Practitioner's Guide (Texere, 2001). Though the real option approach is extremely insightful in terms of the logic underlying investment decisions, its real-world applications are limited; therefore this book will not cover the real option issue.