The Real Options Solution: Finding Total Value in a High Risk World

by F. Peter Boer

Harness the power of real options Real options theory is based on the Nobel Prize--winning work on financial options, and has captured the interest of executives, managers, and investors who need to understand the future profitability of an asset. Originally developed to value technology initiatives and companies, the method is now being applied broadly across various businesses and industries. The Real Options Solution offers comprehensive coverage...

• Format: Hardcover
• Language: English
• ISBN: 0471209988
• ISBN13: 9780471209980
• Release Date: February 2002
• Publisher: John Wiley & Sons
• Length: 406 Pages
• Weight: 0.85 lbs.
• Dimensions: 1.4" x 6.3" x 9.3"

Customer Reviews

Cogent & illuminating look at valuation, risk & innovation

This book was a real revelation to me. The real options approach to valuation is a very valuable new tool, and this book explains how it works in clear terms. Perhaps more important is the extensive, thoughtful and provocative discussion throughout the book of risk and innovation, how to think understand them, and how to frame and manage the full process of value creation in business. This book is cutting edge, but any decision maker or investor in innovative business enterprises should definitely read it.

The most practical book ever read on the subject!

I would like to congratulate Dr. Boer on his success with making "real options" real for the practitioners. I have read many, if not most, most of the books out there on this topic, and found none to be as accessible and fun to read as Dr. Boer's treatment of this subject.I have also bought his other book, The Valuation of Technology - Business and Financial Issues in R & D. Again, full of practical insights that are not available elsewhere.I fail to understand the scathing review of the reader from Norway. Was this person expecting to learn about financial options, instead of real options, from this book? In that case, it was the reader's mistake for picking the wrong book! For real options, this book has no peer. I would recommend it to anyone who wants to apply the real options theory to real-world problems.Thanks Dr. Boer for a job well done and for making a real contribution to realistic valuation and pricing of business opportunities.

Extraordinary Addition to Finance and Value Quantitation

This is an excellent text for an introduction to real options. I especially like the author's overall valuation model for high-technology companies, the "Total Value Model", that combines static discounted cash flow models for products currently generating revenue, and real options for technologies and products in development. I have already recommended this book to several CEOs because its so easy to read and understand. The text does not contain a single formula and is almost totally conceptual, absolutely excellent!!! I am already adopting the author's valuation approach in my own valuation service. Thank you Dr. Boer.

Essential Reading for Valuation of Best Strategies

Dr. Peter Boer's latest book, THE REAL OPTIONS SOLUTION, extends the Yale professor's reputation for highly relevant insights into HOW to best adapt valuation and management decision approaches to today's new challenges. One needs to look no further than Winter 2001-2 headlines about corporate collapses to realize that there's are major limitations with ordinary first generation discounted cashflow (DCF) methods when it comes to valuation of complex companies-- particularly those in advanced technology fields and/or with complex financing structures. The near-term witch hunt response is to dump 'em all. But when the temporary period of Post-Enron / Post-3G and Fiber Excessive Pessimism recedes, management and institutional investors alike will realize that they still need new guidance for valuing corporate decisions. Towards this aim, Professor Boer elevates Real Options from its slightly dusty academic origins to a new dynamic role at the center of major corporation decision making and financial marketplace valuation. To me, the key word in the book's title is SOLUTIONS-- applied in the way that Dr. Boer describes, Real Options are used to represent strategy alternatives to supplement and fundamentally improve core discounted cashflow valuation. His prize, for readers: a full perspective on the corporation's ultimate source of wealth: THE VALUE OF ITS STRATEGIC DECISIONS. This is must reading for corporate executives who seek highest value decisions and ultimately, highest possible shareholder value for the corporation they run. This is also essential reading for institutional investors and other valuation-influencers searching for the best methods for separating tomorrow's outperforming corporations in value terms from the dross.

A significant contribution to the management literature

Dr. Boer's ideas about the economics and management of industrial R & D have had a significant impact. This novel and wonderfully written book provides a modern framework for the analysis of high-risk, high-reward endeavors which include research and development. The methodology has great intellectual appeal: it integrates real options analysis and net present value analysis, thus capturing the traits of the "new" and "old" economies in the same analytical framework. This it does in a practical, pragmatic manner, suitable to real-life problems in opportunity (and risk) management.