An Application of Real Options in Network Deployment Investment Decisions：The Case of a WiMAX Operator

• Main Authors: Hong-Ju Chang, 張虹如
• Other Authors: Tsun-Siou Lee
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/37051956846950792729

碩士 === 國立臺灣大學 === 財務金融學研究所 === 100 === WiMAX is one of the most booming wireless communication technology in the world, recently. All operators invest lots of capital to expand their network capacity for their earning. The return in the future will be a good question to managers. So having an efficiency evaluation and analysis is necessary. Through a case of a WiMAX operator, this study discusses the applications of real option and further identified the uncertainties embedded in network deploying investment. We compared the traditional Discounted Cash Flow Model and Real-option Pricing Model related their suitability. In addition, we adopted sensitivity analysis to analyze the characteristics of real options. We also provided a numerical example to provide feasible assessments for future reference in decision-making. By using the real option approach, the managerial flexibility can be addressed properly for maximum investment return. Our results indicate that the net present value of a project can be expanded with the existence of real options. Real option analysis can take into account the uncertainty and provide flexibility in investment assessments. In strategic investment decisions, not considering the marketing situations and reaction of competitors may result in great deviation between assessed project value and actual outcome.