StudentShare solutions
Triangle menu

The Ability to Value Assets Accurately is at the Heart of the Discipline of Finance. Discuss - Essay Example

Nobody downloaded yet

Extract of sample
The Ability to Value Assets Accurately is at the Heart of the Discipline of Finance. Discuss

Inappropriate asset valuation would fail to determine the actual status of the business performance which would adversely affect the formulation of business strategies.
According to Brigham & Daves (2009), “Real options are opportunities for management to change the timing, scale, or other aspects of an investment in response to changes in market conditions.” (Brigham & Daves, 2009, p.490). Since the real options are concerned with the real assets such as plants, fixtures, and land, it enables the management to take timely and appropriate decisions regarding investment strategies. Brigham and Daves also opine that formulation of model and estimation of input is necessary for the valuation of real options in investments. It will be a cumbersome task for the management to determine the exact value of real options in investment since it includes intangible components like contract, decision to expand or abandon etc. Even though exact valuation of real options is not possible, it helps to determine the sustainability of the proposed project. According to the writers, in order to valuate the real options more accurately, it is better to treat the valuation with a ‘standard model for financial option’. Similarly usage of ‘discounted cash flow valuation and decision tree analysis’ are also better methods in order to increase the accuracy of valuation of real options (Brigham & Daves, 2009, pp.490-491). If the value of underlying asset (an asset underlies and offers value to the particular security or investment) can be properly estimated, then it is possible to find out the value of real options in investment almost accurately. Likewise, while dealing with valuation of real options, it is essential to represent the payouts precisely in order to bring out maximum relevant facts in the valuation process. The Black-Scholes model is a comparatively better method to determine the theoretical value of real ...Show more


The process of asset valuation is one of the central elements of any business as it appears in the financial statement and takes part a role in determining the net profit of the overall business operations. The assets of a business can be mainly categorized into tangible assets…
Author : lisandro85
The Ability to Value Assets Accurately is at the Heart of the Discipline of Finance. Discuss essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The Ability to Value Assets Accurately is at the Heart of the Discipline of Finance. Discuss"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

International Finance (concept of value in corporate finance )
This issue is also highlighted in the statement of Broughton (2010), which is analyzed in this paper. Three are the key issues highlighted in the specific statement: a) the term value is quite common but in the context of the business environment its importance is much higher compared to the daily life, b) as an element of the business environment, the term value can be given different interpretations, reflecting different aspects of each organization and c) when trying to define the context of value, as related to business processes, it would be preferable to focus on specific issues; a simple definition of value would be also applicable in businesses with different characteristics.
12 pages (3000 words) Essay
Finance: net present value
It is this factor that is referred to as the present value interest factor (PVIF). When discounted at a given discount rate (r) over a given number of periods (p) it is then denoted as PVIFr%np. np means 'no. of periods'. 2. 'Io' is the initial cash outlay.
6 pages (1500 words) Essay
Radical changes are needed in company reporting to cope with the rise of intangible assets. Discuss
In essence, an intangible asset has the characteristics like ability of being separately recognized, ability to produce future benefits to the company and the use of the asset results in either reduction of costs or increase in revenues
4 pages (1000 words) Essay
Developmental Assets
ludes involvement in academic and social or extracurricular activies and is considered crucial for achieving positive academic outcomes and preventing dropping out.’ (Fredricks, Blumenfeld & Paris 2004) Emotional engagement involves the response of the student to all
3 pages (750 words) Essay
Explain the relationship between discipline and obedience from a Montessori perspective and discuss how discipline and obedience are linked to the development of the will
The main philosophies that come from the Montessori perspective, as well as the development that is currently used by teachers and administrators is now creating a holistic and well rounded approach to teaching. As this is developing, there
7 pages (1750 words) Essay
Is the nature of crime in our society accurately presented by the media Discuss
What is significant is how well crime is being handled and what kind of measures are in place to make sure that criminals do not get encouraged for a number of different reasons. Even though crime is being documented time and again within the different media circles and
6 pages (1500 words) Essay
Discuss the ability of private individuals to seek damage for breaches of EU competition law
However, the position of private application of European competition law is not as clean as is of the public application in the European Competition Network2. Research on the position of claims for damages in
15 pages (3750 words) Essay
Assets pricing
The main advantages of using this methodology include assistance in doing accurate statistical analysis and assistance in complex financial calculations. The performance of
4 pages (1000 words) Essay
The use of Non-Invasive Blood Pressure measurement devices to accurately measure irregular heart rhythms
Practices based on findings of a research are more likely to overshadow evidence from basic science, clinical knowledge and opinions from experts in producing the desired patient outcomes in different locations and settings.
7 pages (1750 words) Essay
Contrary to the popular belief, discipline is not about punishing those who have erred. Punishment is defined as the application of unpleasant means or pain to control unwanted behavior. Punishment may ‘work’ if all you are interested in is stopping
2 pages (500 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Let us find you another Essay on topic The Ability to Value Assets Accurately is at the Heart of the Discipline of Finance. Discuss for FREE!
Contact us:
Contact Us Now
  • About StudentShare

  • Testimonials

  • FAQ

  • Blog

  • Free Essays
  • New Essays
  • Essays

  • The Newest Essay Topics
Join us:
Contact Us