Valuation of real projects using option pricing techniques

P Dentskevich and G Salkin

Omega, 1991, vol. 19, issue 4, 207-222

Abstract: Over the past few years there have been a number of papers concerned with the pricing of options on real assets. The majority of these draw directly from the work done in the financial sectors. This paper discusses some of the deficiencies of traditional discounted cash flow (DCF) techniques before using the basic framework of the binomial option pricing methodology of Cox et al. [2] to derive a clear and consistent technique for the valuation of real hydrocarbon reserves.

Keywords: options; DCF; asset; valuation (search for similar items in EconPapers)
Date: 1991
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Citations: View citations in EconPapers (5)

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