Market dominance options and asset structure: the case of Microsoft and Cisco
by Wojciech Grabowski
Global Business and Economics Review (GBER), Vol. 5, No. 1, 2003

Abstract: This paper introduces a class of real options, market dominance options (MDOs), to describe corporate strategic investments in the securities of other firms and M&A processes. An implied corporate project risk measure is extracted from the asset structure and used in real option valuation. The MDO methodology is applied to the study of the feasibility of recent major strategic investments of Microsoft and Cisco. The projected added sales figures implicit in the pricing of these transactions under various competitive scenarios are derived and compared with the actual revenue results.

Online publication date: Mon, 07-Feb-2005

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the Global Business and Economics Review (GBER):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com