Valuation of emerging economy investments: Applying real options analysis to Brazilian Timberland investment valuaton

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dc.contributor Aalto University en
dc.contributor Aalto-yliopisto fi Oinonen, Sami 2011-11-14T11:23:41Z 2011-11-14T11:23:41Z 2010
dc.description.abstract PURPOSE OF THE STUDY The objective of the thesis was to find a way to value investment projects in emerging economy environment. The purpose of the study was to find out how the most common valuation methods lend to emerging economy investment valuation. Such an environment is characterized by incompleteness of the markets, private ownership, high transaction costs and unpredictable changes in environment that can cause sudden changes in asset prices, among other aspects that are contrary to the assumptions of many valuation methods. METHODOLOGY The methodology used was to find out from the literature the current methods for valuing emerging economy investments, how those methods are used and what kind of challenges are found in their application. A literature study was also used to find out additional considerations applicable in such a valuation. An alternative process for the valuation based on indifference pricing of real options was developed and finally, a valuation of an investment project is carried out using the process developed, in order to gain experience of the practical applicability of the process. RESULTS In the literature study it was verified that methods such as discounted cashflow analysis together with the cost of equity found though CAPM are problematic in emerging economy setting. It was also found out that using real options pricing based on the indifference prices can be used to include the specific characteristics of emerging economies in the valuation process. The method is also capable of valuing the managerial flexibilities that play important role in dynamic emerging economy environment. en
dc.format.extent 90
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Valuation of emerging economy investments: Applying real options analysis to Brazilian Timberland investment valuaton en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Economics en
dc.contributor.department Department of Business Technology en
dc.contributor.department Liiketoiminnan teknologian laitos fi
dc.subject.keyword Investment valuation
dc.subject.keyword Real Options Analysis
dc.subject.keyword Indifference pricing
dc.subject.keyword CAPM
dc.subject.keyword Brazil
dc.subject.keyword Emerging markets
dc.subject.keyword Emerging economies
dc.subject.keyword BRIC
dc.subject.keyword Timberland investment
dc.identifier.urn URN:NBN:fi:aalto-201111181473
dc.type.dcmitype text en
dc.programme.major Management Science en
dc.programme.major Liikkeenjohdon systeemit fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon johtaminen
dc.subject.helecon management
dc.subject.helecon sijoitukset
dc.subject.helecon investments
dc.subject.helecon arviointi
dc.subject.helecon evaluation
dc.subject.helecon hinnoittelu
dc.subject.helecon pricing
dc.subject.helecon markkinat
dc.subject.helecon markets
dc.ethesisid 12429 0010-06-21
dc.location P1 I

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