Dealmaking: Using Real Options and Monte Carlo AnalysisJohn Wiley & Sons, 2004 M04 16 - 312 pages Applying practical tools to the volatile process of negotiating Prognosticators apply Monte Carlo Analysis (MCA) to determine the likelihood and significance of a complete range of future outcomes; Real Options Analysis (ROA) can then be employed to develop pricing structures, or options, for such outcomes. Richard Razgaitis' Dealmaking shows readers how to apply these powerful valuation tools to a variety of business processes, such as pricing, negotiating, or living with a "deal," be it a technology license, and R&D partnership, or an outright sales agreement. Dealmaking distinguishes itself from other negotiating guides not only by treating negotiations as an increasingly common situation, but also by presenting a tool-based approach that creates flexible, practical valuation models. This forward-thinking guide includes a variety of checklists, case studies, and a CD-ROM with the appropriate software. Richard Razgaitis (Bloomsbury, NJ) is a Managing Director at InteCap, Inc. He has over twenty-five years of experience working with the development, commercialization, and strategic management of technology, seventeen of which have been spent in the commercialization of intellectual property. |
Contents
| 1 | |
| 15 | |
CHAPTER 3 The Box and the Wheelbarrow What Am I Selling or Buying? | 31 |
CHAPTER 4 Discounted Cash Flow Analysis and Introduction to Monte Carlo Modeling | 45 |
CHAPTER 5 Monte Carlo Method | 77 |
CHAPTER 6 Introduction to Real Options | 147 |
CHAPTER 7 Real Options Applied to Dealmaking | 175 |
CHAPTER 8 Knowledge and Unertainty | 219 |
CHAPTER 9 Deal Pricing | 233 |
CHAPTER 10 Negotiation Perspectives and Dynamics | 243 |
CHAPTER 11 Plan B | 255 |
CHAPTER 12 Conclusion | 273 |
| 281 | |
| 283 | |
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Common terms and phrases
20 percent 20th percentile agreement alternative asset assumed assumptions binomial lattice Black-Scholes Black-Scholes equation BSE1 CAGR calculation CapEx cash flow Cell certainty Chapter consider context Correlated corresponding cost ratio create Crystal Ball DCF analysis deal manager deal team dealmaking determined discount discussed distribution with parameters EBIT effect equation equity example face card factors financial model future hurdle rate investment license log-normal distribution mean value million Monte Carlo method Monte Carlo model negotiation normal distribution NPV values ofthe one’s option value outcomes parties payment perspective Plan point Single point portunity possible potential present value range rating/ranking Real Options Analysis reasonable result revenues risk risk-neutral probability royalty scenario scenario analysis seller shown in Exhibit side simply Single point Single standard strike price term sheet tion triangular distribution uncertainty underlying uniform distribution valuation value of RAHR volatility Wheelbarrow YHOO
Popular passages
Page 12 - COMPROMISE, n. Such an adjustment of conflicting interests as gives each adversary the satisfaction of thinking he has got what he ought not to have, and is deprived of nothing except what was justly his due.
References to this book
Options Based Management: Vom Realoptionsansatz zur optionsbasierten ... Yves Hilpisch Limited preview - 2006 |