Using the real-options approach to value a high-growth company has an advantage over the discounted cash flow method in that it requires fewer estimates (e.g. ,it does not require a long-term revenue growth rate).

Question

Quizplus · Accepted Answer

The real-options approach often requires more complex estimates and assumptions, including volatility and the value of various options, in addition to the estimates required by the discounted cash flow method.

Using the Real-Options Approach to Value a High-Growth Company Has