Bivariate Copula-TGARCH model for real option valuation

The valuation methodologies commonly used by the project managers, based on the discount cash flow perspective, follow unrealistic assumptions that barely relate to business conditions. Their inability to consider elements such as flexibility, uncertainty and irreversibility leads to an undervaluation of the investment projects. The real option analysis is gaining popularity in the academic and practitioner arenas because it outperforms the traditional valuation techniques specifically, by its treatment of uncertainty and strategic thinking incorporation --Abstract.