CFA Level 2 | Corporate Finance: Real Options - Abandonment Option

[@ArunKumar-yb2jn]

Interesting. Seems more realistic than the usual linear approach of traditional DCF analysis.

[@aeentertainment149]

Thank you for clearing concept.

[@JulietMurindi-pl9wi]

Awesome video, clearly explained. Thank you.

[@FabianMoa]

Glad it was helpful, Juliet!

[@ExcelTutorials1]

Thank you for the awesome video!!!

[@FabianMoa]

Glad you liked it!

[@jd5787]

Thanks for sharing this video, it's very interesting. How would you use real options in M&A? I read value = npv + OV + AV where OV captures the value of new/yet unproven products to be sold and AV the recoupment of the cost to acquire the target company in case acquirer decides to sell the acquired later on. Is there practical info on how to implement? Thank you

[@syeedmohammeduzzalhossain5452]

Thank you.

[@propersuspect2959]

And here I was thinking CFA is hard lol. Masters blew this stuff out of the water.

[@yoginidawar]

Thank you!!!

[@jasontsui2256]

Do we need to use Black scholes option pricing model and put call parity to estimate this abandonment option?

[@FabianMoa]

For CFA exams, no.

[@jasontsui2256]

@@FabianMoa I see

[@tejasgupta9129]

very well explained

[@FabianMoa]

Thank you!