In considering the value of a real option to the target of a merger or acquisition,the most important factor to be considered is:

Question

Quizplus · Accepted Answer

The most important factor to consider in valuing a real option to the target of a merger or acquisition is whether the real option is a true option or an eventuality. A true option provides the holder with the right, but not the obligation, to take a certain action in the future. An eventuality, on the other hand, is a situation that will occur as a result of the merger or acquisition and does not provide the holder with any optionality. Therefore, it is important to determine whether the real option is a true option that adds value to the target or an eventuality that does not affect the value of the target.

In Considering the Value of a Real Option to the Target