A FUZZY PAY-OFF METHOD FOR REAL OPTION VALUATION IN DETERMINATION OF MINING ENTERPRISE VALUE
DOI:
https://doi.org/10.47839/ijc.13.4.640Keywords:
enterprise value, pay-off method, real option, fuzzy numbers.Abstract
The article presents the use of real options in determination of mining enterprise value. The value estimation is based on discounted cash flow method. The adoption of fuzzy numbers allows introducing a risk aspect to the known method of determination of enterprise value. A classic discounted cash flow method uses one scenario on the basis of which one value is determined. The method presented is grounded on three scenarios: optimistic, the most probable, pessimistic. On this basis the values defining a fuzzy number are indicated. Algorithm of this defuzzification, based on the idea of real options enables indicating a concrete value.References
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