Below is some great content about different business valuation methods. If you are looking for some advanced modeling literature, I can highly recommend this modeling package which I have found extremely useful in helping me mastering both Excel and financial modeling - which works as a stable knowledge base in my investment banking carrier.

Real Option Valuation

Real option is an actual option (in the sense of “choice”) that a business may gain by undertaking certain endeavors. The real option captures the value of managerial flexibility to adapt decisions by expanding, downsizing, or abandoning investment projects in the future in response to unexpected market developments. In this context, real option valuation model applies basically the same theory and calculation formula as the financial option pricing models to quantify the value of management flexibility in a world of uncertainty.


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