Stock market valuation with real options :  lesson from netscape 

 -  2002 
<br/><br/> Discounted cash flow is the main tool for valuing projects and companies. Real options techniques can augment valuation. The case of Netscape is used to demonstrate this. We begin with a defensive cash flow scenario. On top of this, we superimpose a number of real options valuations. Some experts would dispute our methodology because it is not built upon market-priced risk. Nonetheless, it provides an approximate valuation. We prefer equity valuation using various methodologies, including real options where appropriate, to arrive at a range of value. But we cannot, using financial logic, justify the high Netscape flotation price 
<br/><br/><label>Subjects--Topical Terms: </label><br/>Stock Market Valuation<br/>Real Options<br/>Volatility<br/>Competitive Advantage Period