The Valuation of New Ventures

Traditional tools fail to capture the value of new ventures, such as R&D
projects and start-up companies, because of their dependence on future
events that are uncertain at the time of the initial decision. In the real
options setting the value of these investments is the value of the follow-on
opportunities they may create.

Our aim is to study the multicompound
option approach to value sequential investment opportunities taking into
account multiple interactions among real options.

Luigi Sereno

Full Story: http://www.dse.unibo.it/wp/554.pdf