Recent research has shown that companies face considerable difficulties in implementing a value-based management of theirIT portfolios. This paper therefore presents an approach for measuring and managing the business value of IT investments.To ensure practicability, our approach is derived from...

Previous research has shown that frictions might have a significant impact on the value of a contingent claim, as discussed, for example, in Karatzas & Kou (1996)and Collin-Dufresne & Hugonnier (2002). We consider two types of frictions particularly important: frictions related to trading, such...