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Application of Binomial Model and Market Asset Declaimer Methodology for Valuation of Abandon and Expand Options. The Case Study

Author(s): Paweł Mielcarz

Journal: Contemporary Economics
ISSN 2084-0845

Volume: 1;
Issue: 2;
Start page: 1;
Date: 2007;
Original page

The article presents a case study of valuation of real options included in a investment project. The main goal of the article is to present the calculation and methodological issues of application the methodology for real option valuation. In order to do it there are used the binomial model and Market Asset Declaimer methodology. The project presented in the article concerns the introduction of radio station to a new market. It includes two valuable real options: to abandon the project and to expand.
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