Valuing a Highway Concession with Real Options
Real Options Analysis
Monte Carlo Simulation
Blog Post: Valuing a Highway Concession with Real Options
Overview - Real Options: DPL White Paper - Real Options Tips and Techniques.pdf
DPL was used to perform a real options valuation and risk analysis of a highway concession for a private organization. Competing firms had to assess not only the value of the concession but also the economic and political risks involved. The organization employing DPL submitted the winning bid for the concession -- the transfer of ownership proved to vastly enhance road quality and safety. Further, performance to this date has been in line with the DPL valuation model.
Real options techniques can bring insight to the analysis of investments with a high degree of uncertainty. DPL provides a rich set of features for dealing with complex, real world, real options problems -- from building the model to making sense of the results. DPL's unique combination of power, flexibility and transparency has made it the professional's choice for real options analysis.