Glossary
Abandonment option The option to abandon a project is valuable in research and development as it provides the flexibility to abandon a project in the presence of negative results. An abandonment option can be applicable in the valuation of pharmaceutical firms on account of procedures used by pharmaceutical researchers and high costs involved in the development stages.
Accounting betas Accounting betas are estimated by regression of the company’s return on assets against the average return on assets for large sample of firms as included in a market index.
Adjusted present value (APV) method APV method is used to value companies as well as projects. In the APV method, the value of the firm is obtained as its value as an all equity ...
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