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http://dx.doi.org/10.5762/KAIS.2011.12.7.3016

Valuation of New Growth Businesses by Compound Option Model: Comparison of Solar Cell, Automotive Battery, and Bio-Pharmaceutical  

Kwon, Oh-Sang (Graduate School of Innovation and Technology Management, Korea Advanced Institute of Science and Technology)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.12, no.7, 2011 , pp. 3016-3021 More about this Journal
Abstract
While there is ample information on the investment plans about Korea's selected new growth businesses, it is hard to find any analysis on the valuation of the projects. In this paper, I intend to do a valuation for the three particular technologies, which are solar cell, automotive battery, and bio-pharmaceutical, based on compound option model so that the valuation can capture not only the expected net cash flow but also the value originated from the flexibility of the decision maker. In addition, the real option pricing theory is reviewed and its practical limitations are thoroughly investigated.
Keywords
Technology Valuation; Compound Option; Solar Cell; Automotive Battery; Bio-Pharmaceutical;
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Times Cited By KSCI : 2  (Citation Analysis)
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