Da Fonseca Rodrigues P.H.,Bain and Company Brazil |
De Castro Ferreira V.A.,Federal University of Rio de Janeiro |
Funcia Lemme C.,Federal University of Rio de Janeiro |
Brandao L.E.T.,Pontifical Catholic University of Rio de Janeiro
Gestao e Producao | Year: 2013
In this study a biotech start-up company was evaluated using the Real Options method. The main objective was to verify whether the Real Options is a better pricing method for tech or biotech companies that operate in an uncertain enviroment. In order to determine the undervaluation resulting from the Discounted Cash Flow method without taking the Real Options into account the case of BioNatural, a start-up biotech company incubated at the BioRio Biotecnology Park, was analized. The results indicate a 16% undervaluation, approximately, and they indicate that the real options approach may be more appropriate to evaluate projects subject to extreme uncertainty since it can determine a value that is not measured by traditional valuation project methods.