Corporate Investment Decisions and the Value of Growth Options

  title={Corporate Investment Decisions and the Value of Growth Options},
  author={Tony W. Tong},
Recent applications of real options theory in strategy research have examined investment decisions framed as the purchase or exercise of particular options, but research has yet to offer direct evidence on whether firms actually capture option value from such investments. In this paper, we estimate the proportion of firm value accounted for by growth options and link the growth option value to corporate investments that have been commonly viewed as providing valuable growth options. The… CONTINUE READING

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