A real options approach to valuing agricultural resource assets under uncertainty: US corn crops

Marcus Smith, Simone Kelly, Ray McNamara

Research output: Contribution to conferenceAbstractResearchpeer-review

Abstract

Real options are well known for their usefulness in evaluating non-renewable resources. This study derives an asset valuation model using real options methodology to evaluate renewable agriculture investments. The model calculates the value of an investment project as well as computing the critical strike prices at which it becomes optimal to exercise various options over the asset, including when to invest (commence or recommission operations), disinvest (temporarily decommission or delay operations) or abandon the asset altogether. The model incorporates the real options approach into a traditional valuation framework to develop an objective means for calculating a risk-adjusted discount rate applicable to traditional discounted cash flow valuations.
Original languageEnglish
Pages1-1
Number of pages1
Publication statusPublished - 2015
Event27th Asian-Pacific Conference on International Accounting Issues: Global Perspectives of Accounting Information in the 21st Century - Gold Coast, Australia
Duration: 1 Nov 20154 Nov 2015
Conference number: 22nd
http://www.apconference.org/

Conference

Conference27th Asian-Pacific Conference on International Accounting Issues
CountryAustralia
CityGold Coast
Period1/11/154/11/15
Internet address

Fingerprint

Resources
Real options
Uncertainty
Assets
Crops
Corn
Usefulness
Methodology
Non-renewable resources
Discounted cash flow
Valuation model
Asset valuation
Agriculture
Investment project
Exercise
Discount rate

Cite this

Smith, M., Kelly, S., & McNamara, R. (2015). A real options approach to valuing agricultural resource assets under uncertainty: US corn crops. 1-1. Abstract from 27th Asian-Pacific Conference on International Accounting Issues, Gold Coast, Australia.
Smith, Marcus ; Kelly, Simone ; McNamara, Ray. / A real options approach to valuing agricultural resource assets under uncertainty : US corn crops. Abstract from 27th Asian-Pacific Conference on International Accounting Issues, Gold Coast, Australia.1 p.
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Smith, M, Kelly, S & McNamara, R 2015, 'A real options approach to valuing agricultural resource assets under uncertainty: US corn crops' 27th Asian-Pacific Conference on International Accounting Issues, Gold Coast, Australia, 1/11/15 - 4/11/15, pp. 1-1.

A real options approach to valuing agricultural resource assets under uncertainty : US corn crops. / Smith, Marcus; Kelly, Simone; McNamara, Ray.

2015. 1-1 Abstract from 27th Asian-Pacific Conference on International Accounting Issues, Gold Coast, Australia.

Research output: Contribution to conferenceAbstractResearchpeer-review

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Smith M, Kelly S, McNamara R. A real options approach to valuing agricultural resource assets under uncertainty: US corn crops. 2015. Abstract from 27th Asian-Pacific Conference on International Accounting Issues, Gold Coast, Australia.