2.1.4. Financial instruments valuation
This approach is mostly used in listed companies and associated financial products. It uses models for options and other derivative financial instruments to valuate the reference assets. Hence, it is an approach that is not likely to be used in non-listed companies. The following methods are available:
- Black-scholes;
- Investment option;
- Expand the project;
- Delay the investment.
Next Section: 3. Understanding the cost of capital