Lost dividends are used in the Black-Scholes model for financial options and as an approximate delay cost in realoptions. More realistic scenarios include the loss of initial cash flows, delays in starting to receive the same numberof cash flows, loss of cash flows at the project horizon, and permanent loss of market share. The outcomes arecompared with the often unrealistic case of omitting these delay costs. The literature is surveyed for the relativefrequency with which each of the modeling options are used. We suggest that the common omission of waitingcosts is rarely appropriate.
展开▼
