Delay
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OPTION WORKSHEET: LONG TERM OPTIONS
VALUING AN OPTION TO DELAY A PROJECT This program calculates the value of the option to delay making an investment. Inputs relating the underlying asset Enter the present value of cash flows from investing in project $350.00now(in = currency) Entet the annualized standard deviation in ln(present value 22.36% of CF) Enter the initial investment needed to take project (in PV $500.00 $) = Enter the number of years you have rights to project
(in %) (in currency)
20
(in years)
General Inputs Enter the riskless rate that corresponds to the option lifetime 7.00% =
(in %)
Output Stock Price=
$350.00
T.Bond rate=
Strike Price=
$500.00
Variance=
Expiration (in years) = 20
Annualized dividend yield=
7.00% 0.05 5.00%
OPTION WORKSHEET: LONG TERM OPTIONS
d1 =
0.54
N(d1) =
0.71
d2 =
-0.46
N(d2) =
0.32
Value of Option to Delay =
$51.03
VALUING AN OPTION TO DELAY A PROJECT This program calculates the value of the option to delay making an investment. Inputs relating the underlying asset Enter the present value of cash flows from investing in project $350.00now(in = currency) Entet the annualized standard deviation in ln(present value 22.36% of CF) Enter the initial investment needed to take project (in PV $500.00 $) = Enter the number of years you have rights to project
(in %) (in currency)
20
(in years)
General Inputs Enter the riskless rate that corresponds to the option lifetime 7.00% =
(in %)
Output Stock Price=
$350.00
T.Bond rate=
Strike Price=
$500.00
Variance=
Expiration (in years) = 20
Annualized dividend yield=
7.00% 0.05 5.00%
OPTION WORKSHEET: LONG TERM OPTIONS
d1 =
0.54
N(d1) =
0.71
d2 =
-0.46
N(d2) =
0.32
Value of Option to Delay =
$51.03
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