Real Options: A Practitioner's Guide (Hardcover)

~ Thomas E. Copeland (Author), Vladimir Antikarov (Author), (Author)

Editorial Reviews

Review

Amazon.co.uk Review The business world moves fast these days, too fast for some. Real Options: A Practitioner's Guide aims to give those making investment decisions for their companies the paths, or options, that will allow their firms to survive and thrive. Who, in 2000, would have envisaged the success story that was BT being forced to split in two just to survive?

Product Description

Tom Copeland's landmark book Valuation: Measuring and Managing the Value of Companies sold in excess of 200,000 copies and was translated into more than 10 languages. The Financial Times declared that its "clarity and competence" made it "one of the best practitioners' guides to valuation." Now, Tom Copeland and Vladimir Antikarov offer the first practical tool explaining the latest state-of-the-art thinking sweeping the corporate world: real options. While option theory itself may have originated in the highly complex world of financial trading, the concept is now firmly placed within the corporate arena, as demonstrated by recent media coverage in The Economist, Business Week, and CFO Europe. Utilizing real options can transform the shifting business landscape into a strategic weapon by creating flexibility in decision making. Given the volatility of the new economy, real options are set to become the key management tool for today's businesses. In this book, the authors offer corporate decision makers the ability to assess the profitability of their ventures and decide which avenue of expansion or investment to go down and, crucially, when to take that leap. The authors take the reader on a journey through real options, from the basics of what they are and how to implement the ideas, through to more advanced topics such as options and game theory, and managing portfolios of options. Throughout the text, analogies, examples, sample problems, illustrations, and reviews are used to explain the techniques. Real Options provides expert guidance on how to implement the theory to maximize investment opportunities by utilizing uncertainty as an asset and reducing downside risk. The book will be accompanied by a website offering solutions to the end of chapter problems prepared by the authors together with a suite of real option models.

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Product Details

• Hardcover: 320 pages
• Publisher: W. W. Norton & Company; 1st edition (February 15, 2001)
• Language: English
• ISBN-10: 1587990288
• ISBN-13: 978-1587990281
• Product Dimensions: 8.9 x 6.1 x 1.5 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 2.8 out of 5 stars  See all reviews (20 customer reviews)
• Amazon.com Sales Rank: #896,069 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

17 of 17 people found the following review helpful:

1.0 out of 5 stars ..., July 31, 2001

By A Customer

This book has WAY TOO MANY errors. The amount of errors and the types of errors this book contains is unacceptable. If the quantity and quality of the errors weren't bad enough, the explanations (if you can call them that) are confusing or incomplete. This book also has many omissions (parts that the authors promise will be included in parts of the book are MISSING!!!). It would be extremely difficult to use this book as a practical guide to real options with all of its errors, omissions, and confusions.

I can safely say that I have NEVER read any book with this MANY errors and omissions ... and I have read quite a lot of books on finance, economics, and math.

By the way, I and other readers do NOT pay full price so that they can get a "rough draft." Readers pay for the final product and readers can reasonably expect a product of higher quality.

25 of 28 people found the following review helpful:

2.0 out of 5 stars Not a true practitioner's guide, January 29, 2002

By	Stacy E. Burrell "stacyburrell.blogspot.com" (Detroit, MI USA) - See all my reviews (REAL NAME)

I read an article on this book before publication and was excited about getting a copy. Past works on real options analysis(ROA) have been heavy on theory, but low on application. However, as I read through this book I was disappointed in how the content was presented.

First, the good points. The book is more application-oriented than other books on the subject thus far. The book is thorough in its discussion of real options analysis, and demonstrates how to estimate volatility, which has been poorly explained by other authors. The book provides lots of case studies and examples. Finally, the methodology is simple to follow.

Now, the bad points. Enough has been written about the book's errors in other reviews. Also, the solutions should have been provided for free. The most disappointing part is the authors' claim that this is a "practitioners" guide and that ROA will eventually replace NPV in corporate valuation. If you are a financial engineer or quant-jock for an I-Bank, Consultancy or Treasury group, then it is a practitioner's guide. Otherwise, the book is written above the level of the industry financial analyst, particularly beginners. The authors' use Everett Roger's five attributes of innovation that determine its rate of adoption. One attribute is low complexity for easy understanding and implementation. This book is very complex and it's no wonder why ROA has a slow adoption rate among corporations.

Bottomline, the book needs to be rewritten properly from an editorial standpoint. More importantly, Mr. Copeland needs to decide whether he truly wants to bring ROA to the corporate masses or keep it in the hands of a few who can sell their expertise to companies

45 of 54 people found the following review helpful:

5.0 out of 5 stars Extremely well written guide to implementing real options, March 17, 2001

By A Customer

This book, a worthy sequel to 'Valuation' by the The McKinsey & Company, Copeland, Koller, and Morrin, provide a solid backgound on the state of the art in the practice of real options analysis. This book is not a intended to be a "teaser," which tries to tell you enough to whet your appetite so if you want to know more you will have to hire the authors as your consultants. The book is comprehensive in its treatment of the subject. The authors honestly want to teach readers how to implement real options analysis. It has detailed case studies on applying real options analysis, one about an IT-based firm, another about a pharmaceutical company. To top it off, the book even has mind expanding end of chapter exercises with answers that can be downloaded from the text web site. This will be a standard reference for practitioners. This text will be the leading MBA text on real options.