The Real Options Component of Firm Market Value: the Case of the Technological Corporation

Pablo de Andrés Alonso, Valentín Azofra Palenzuela () and Gabriel de la Fuente Herrero ()
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Valentín Azofra Palenzuela: Departamento de Economía Financiera y Contabilidad, Facultad de Ciencias Económicas y Empresariales, Universidad de Valladolid, http://www2.eco.uva.es/conta/
Gabriel de la Fuente Herrero: Departamento de Economía Financiera y Contabilidad, Facultad de Ciencias Económicas y Empresariales, Universidad de Valladolid, http://www2.eco.uva.es/gfuente/

No 2001-10, Documentos de Trabajo "Nuevas Tendencias en Dirección de Empresas". Working Papers "New Trends on Business Administration". from Interuniversitary Doctorate Program "New Trends on Business Administration", Universities of Valladolid, Burgos and Salamanca (Spain). Programa de Doctorado Interuniversitario "Nuevas Tendencias en Dirección de Empresas", Universidades de Valladolid, Burgos y Salamanca (España).

Abstract: The aim of this paper is to examine the notion that the market value of companies reflects the investors’ expectations with regard to the value of real options. We test the empirical relation between alternative estimates of the proportion of total firm market value accounted for by the value of real options and a series of variables that are supposed to disclose the actual or potential holding of real options by the company. The analysis is implemented based on a sample of 569 technological companies listed on the main OECD stock markets in the period from December 1994 to December 1999. Our analysis provides evidence in favor of the relevance of the real options portfolio value of the firm in its total market value.

Keywords: Real options; Technological Industry; Market Value. (search for similar items in EconPapers)
Date: 2001-12

Published in Journal of Business Finance & Accounting, vol. 33 no. 1&2, 2006, pages 203-219

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Journal Article: The Real Options Component of Firm Market Value: The Case of the Technological Corporation (2006-01)
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