Valuation of a Company's Source of Financing Using the Strategic Real Options Approach

The "Valuation of a Company's Source of Financing Using the Strategic Real Options Approach" paper centers on the exploration and appraisal of a company's expanded Net Present Value (NPV) in relation to its available financing options, utilizing an advanced real options approach. It represents a synthesis of the latest developments in corporate finance, real options, and game theory. The primary objective of this study is to estimate the value of managerial decisions, making it an apt tool for valuing corporate strategy and its inherent flexibility.
The real options approach adopted in this work is pivotal for understanding the dynamic nature of corporate finance, especially in how companies navigate their financing strategies. By integrating modern theories from different finance domains, the approach offers a more nuanced and comprehensive perspective on financial decision-making.
This methodological innovation is particularly relevant in the context of valuing strategic flexibility. In a rapidly evolving business landscape, the ability to adapt and respond to changes in financing conditions is crucial. The real options approach provides a framework for quantifying this adaptability, allowing companies to make informed decisions that align with their long-term strategic goals.
In summary, the article provides a critical analysis and a practical application of an expanded NPV calculation, enhancing traditional financial evaluation models with the strategic insights offered by the real options approach. This not only aids in more accurate financial valuation but also in strategic planning and decision-making for businesses looking to optimize their financial and strategic outcomes.
Publisher: Scientific papers NaUKMA: Economics, the National University of “Kyiv-Mohyla Academy”, Vol. 159, Economic Sciences, pp. 78–80. ISSN: 1996-5931.
The full manuscript of the "Valuation of a Company's Source of Financing Using the Strategic Real Options Approach" paper is available at: https://www.slideshare.net/DmytroShestakov/scientific-papers-naukma-economics-vol-159-2014-7880.
Dmytro Shestakov, 2014