Real option and Private equity: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Link with related real option pages.)
 
(Add link.)
 
Line 1: Line 1:
Real options are the valuable operational choices available to the owners of projects and of businesses.
1.


For example, the options to expand, contract, defer or abandon the project (or business).
Equity and other forms of capital for privately owned firms with high growth potential.




The existence of valuable real options in favour of the owners generally increases the total value of a project or business.
2.


For this reason a real options analysis of a proposal may in some cases result in a decision to proceed with the project, in circumstances where other project evaluation techniques would have led to rejecting the proposal.
Firms or individuals who make investments in such firms, sometimes abbreviated to PE.




However, it is also possible that a proposal may grant real options - perhaps inadvertantly - in favour of other parties.
3.


In such a case, the other parties might in future exercise their real options ''against'' the interests of the owners, causing losses to the owners.
The equity of a privately owned company.
 
Such real options in favour of other parties are ''liabilities'' of a project or business, and ''reduce'' the total net value of the project or business.




== See also ==
== See also ==
* [[CertFMM]]
* [[3i]]
* [[Option]]
* [[Alternative Credit Council]] (ACC)
* [[Project appraisal]]
* [[Association for Financial Markets in Europe]] (AFME)
* [[Real]]
* [[Business angel]]
* [[Real options valuation]]
* [[Capital markets union]] (CMU)
* [[Expansion option]]
* [[Co-investment]]
* [[Deferment option]]
* [[Entrepreneur]]
* [[Contraction option]]
* [[Equity]]
* [[Termination option]]
* [[General partner]]
* [[Abandonment option]]
* [[Industry agnostic]]
 
* [[Limited partner]]
 
* [[Liquidity event]]
=== Other resources ===
* [[Listed company]]
* [[Media:2015_07_July_-_Hidden_treasure.pdf| Hidden treasure, The Treasurer, 2015]]
* [[Listing]]
* [[PIPE]]
* [[Private]]
* [[Private equity house]]
* [[Taking private]]
* [[Trade sale]]
* [[Venture capital]]


[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:The_business_context]]

Revision as of 03:47, 6 February 2024

1.

Equity and other forms of capital for privately owned firms with high growth potential.


2.

Firms or individuals who make investments in such firms, sometimes abbreviated to PE.


3.

The equity of a privately owned company.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Real_option&oldid=54572’