A FUZZY PAY-OFF METHOD FOR REAL OPTION VALUATION IN DETERMINATION OF MINING ENTERPRISE VALUE

Authors

  • Marian Turek
  • Adam Sojda

DOI:

https://doi.org/10.47839/ijc.13.4.640

Keywords:

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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M. Turek, Modele Finansowania Działalności Operacyjnej Przedsiębiorstw Górniczych, GIG Katowice, 2011

M. Turek, A. Sojda, Determination of enterprise value by using the fuzzy pay-off method for real option valuation, in Proceedings of the 7th IEEE International Conference on Intelligent Data Acquisition and Advanced Computing Systems (IDAACS’2013), Berlin, Germany, (12-14 September 2013), pp. 597-600.

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Published

2014-08-01

How to Cite

Turek, M., & Sojda, A. (2014). A FUZZY PAY-OFF METHOD FOR REAL OPTION VALUATION IN DETERMINATION OF MINING ENTERPRISE VALUE. International Journal of Computing, 13(4), 264-270. https://doi.org/10.47839/ijc.13.4.640

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Articles