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dc.contributor.authorAdkins, Roger
dc.contributor.authorPaxson, D.
dc.date.accessioned2016-10-04T13:17:25Z
dc.date.available2016-10-04T13:17:25Z
dc.date.issued2016
dc.identifier.citationAdkins R and Paxson D (2016). The effects of an uncertain abandonment value on the investment decision. The European Journal of Finance. 23(12): 1083-1106.en_US
dc.identifier.urihttp://hdl.handle.net/10454/9505
dc.descriptionYesen_US
dc.description.abstractUsing a three-factor stochastic real option model framework, this paper examines the effects of abandonment on the investment decision. Abandonment is classified according to whether the opportunity arises for an active operating asset post-investment, or for holding the project opportunity pre-investment. Separate analytical models are developed for the alternative forms of abandonment optionality. Numerical sensitivity analysis shows that the presence of a post-investment abandonment opportunity makes the investment opportunity appear to be more attractive because of the abandonment option value, but not by a considerable amount. Also, in contrast to the standard real option finding, an abandonment value volatility increase produces a project value threshold fall owing to the increase in the abandonment option value.en_US
dc.language.isoenen_US
dc.relation.isreferencedbyhttp://dx.doi.org/10.1080/1351847X.2015.1113195en_US
dc.rights© 2016 Taylor & Francis. This is an Author's Original Manuscript of an article published by Taylor & Francis in The European Journal of Finance on 3Feb 2016 available online at http://dx.doi.org/10.1080/1351847X.2015.1113195en_US
dc.subjectReal option analysis; Abandonment value; Post / pre investmenten_US
dc.titleThe effects of an uncertain abandonment value on the investment decisionen_US
dc.status.refereedYesen_US
dc.date.Accepted2015-10-22
dc.date.application2016-02-03
dc.typeArticleen_US
dc.type.versionAccepted Manuscripten_US


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