scholars. This study, differing from previous ones, proposes an alternative approach for this hypothesis using a real options … framework with the extension of agency theory. Method: The real options model is built using the least square Monte Carlo method … classical real options call model. This is mainly due to franchise contractual arrangement, where royalty fee lower the …

financial terms, the value of an interconnector is the same as a strip of real options written on the spread between power …-reverting jump process and express the value of these real options in closed-form. The valuation tool is applied to five pairs of …

-to-market characteristics. We model two primitive assets: value assets and growth assets that are options on assets in place. The cost of option … place. Consequently, growth options are less risky than value assets, and the model features a value premium. Our model …