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oaioai:ojs.www.kspjournals.org:article/2296

Real options: Capital investment appraisal; estimating the market price of risk and application to the valuation of a new business

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Publication date
5 July 2022
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Journal of Economics Bibliography
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    Abstract

    Abstract. The risk-neutral valuation approach to evaluating an investment avoids the need to estimate risk-adjusted discount rates, but it does require the market price of risk parameters for all stochastic variables. When historical data is available on a particular variable, its market price of risk can be estimated using the capital asset pricing model.Keywords. Real options; Capital investment appraisal; Market price of risk; New business valuation; Internet companies; Amazon.JEL. G30; G31; G32; N00; N80; M10

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    Last time updated on 15/08/2022

    This paper was published in Journal of Economics Bibliography.

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