A Real Options Analysis of TransEuropean Telecommunications Wireline Video Deployment

Marcel Boyer and Éric Gravel

CIRANO Working Papers from CIRANO

Abstract: The goal of this paper is to demonstrate how the RO methodology can be applied to evaluate TransEurope Communications (TEC) investment projects. Although realistic, the business case analysed here is fictional. The main conclusion and lesson of this exercise is: One cannot determine a value maximizing investment strategy if one does not value managerial flexibility in an appropriate way. L'objectif de ce cahier est de montrer comment la méthodologie des options réelles peut être appliquée pour évaluer les projets d'investissement de TransEurope Communications (TEC). Bien que réaliste, l'investissement considéré ici est purement fictif. La conclusion principale de l'exercice est à l'effet qu'on ne peut pas concevoir une stratégie d'investissement optimale si on n'évalue pas de manière explicite la flexibilité managériale de façon appropriée.

Keywords: investment evaluation; telecoms; real options; managerial flexibility; évaluation des investissements; télécoms; options réelles; flexibilité managériale. (search for similar items in EconPapers)
Date: 2012-10-01
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2012s-25

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