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Managerial flexibility using ROV : a survey of top 40 JSE listed companies
Thesis (MComm (Business Management))--University of Stellenbosch, 2006.
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| Format: | Thesis |
| Language: | English |
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Stellenbosch : University of Stellenbosch
2008
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| _version_ | 1867613944226512896 |
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| access_status_str | Open Access |
| author | Mokenela, Lehlohonolo |
| author2 | Van Rooyen, J. H. |
| author_browse | Mokenela, Lehlohonolo Van Rooyen, J. H. |
| author_facet | Van Rooyen, J. H. Mokenela, Lehlohonolo |
| author_sort | Mokenela, Lehlohonolo |
| collection | Thesis |
| dc_rights_str_mv | University of Stellenbosch |
| description | Thesis (MComm (Business Management))--University of Stellenbosch, 2006. |
| format | Thesis |
| id | oai:scholar.sun.ac.za:10019.1/3469 |
| institution | Stellenbosch University (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:44:10.803Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from SUNScholar — Stellenbosch University Repository |
| publishDate | 2008 |
| publishDateRange | 2008 |
| publishDateSort | 2008 |
| publisher | Stellenbosch : University of Stellenbosch |
| publisherStr | Stellenbosch : University of Stellenbosch |
| record_format | dspace |
| source_str | SUNScholar — Stellenbosch University Repository |
| spelling | oai:scholar.sun.ac.za:10019.1/3469 Managerial flexibility using ROV : a survey of top 40 JSE listed companies Mokenela, Lehlohonolo Van Rooyen, J. H. University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Business Management. Real options Capital budgeting JSE top 40 Managerial flexibility Capital investments -- Valuation -- South Africa Real options (Finance) -- South Africa Capital budget -- South Africa Dissertations -- Business management Theses -- Business management Assignments -- Business management Thesis (MComm (Business Management))--University of Stellenbosch, 2006. For the last 40 years, academics advocated the use of the traditional Discounted Cash Flow (DCF) techniques but these suggestions were ignored by practitioners for a long time. The Net Present Value (NPV), Internal Rate of Return (IRR) and Present Value Payback Period (PVPP) are now some of the more widely used traditional DCF-based techniques, especially among large firms. However, academics are now criticising these techniques as they are based on rigid assumptions that ignore the management of flexibility in projects. The Real Option Valuation (ROV) is suggested as an alternative technique because it implicitly incorporates this flexibility in project valuation. With ROV, opportunities in projects are treated as real options and are therefore valued using financial option principles. Real options give the firm the opportunity to act on an investment project (invest, abandon, rescale) at a later date, when more information is available. As with the traditional DCF-based techniques in the past, few firms seem to have adopted ROV despite academics’ recommendations. This study is thus aimed at determining through a survey, whether the largest firms in South Africa, specifically those included in the JSE/FTSE Top 40 index, are using ROV. Based on the results of the survey, it is concluded that firms generally do not use ROV as only nine percent of the respondents were found to be using it. This is largely attributed to managers being unaware of the technique, and to some extent, to the technique’s complexity. On the other hand, managers were generally found to recognise the flexibility despite not using ROV, although it was not confirmed whether they quantify this flexibility. Masters 2008-11-20T12:00:40Z 2010-07-09T11:10:59Z 2008-11-20T12:00:40Z 2010-07-09T11:10:59Z 2006-12 Thesis http://hdl.handle.net/10019.1/3469 en University of Stellenbosch application/pdf Stellenbosch : University of Stellenbosch |
| spellingShingle | Real options Capital budgeting JSE top 40 Managerial flexibility Capital investments -- Valuation -- South Africa Real options (Finance) -- South Africa Capital budget -- South Africa Dissertations -- Business management Theses -- Business management Assignments -- Business management Mokenela, Lehlohonolo Managerial flexibility using ROV : a survey of top 40 JSE listed companies |
| title | Managerial flexibility using ROV : a survey of top 40 JSE listed companies |
| title_full | Managerial flexibility using ROV : a survey of top 40 JSE listed companies |
| title_fullStr | Managerial flexibility using ROV : a survey of top 40 JSE listed companies |
| title_full_unstemmed | Managerial flexibility using ROV : a survey of top 40 JSE listed companies |
| title_short | Managerial flexibility using ROV : a survey of top 40 JSE listed companies |
| title_sort | managerial flexibility using rov a survey of top 40 jse listed companies |
| topic | Real options Capital budgeting JSE top 40 Managerial flexibility Capital investments -- Valuation -- South Africa Real options (Finance) -- South Africa Capital budget -- South Africa Dissertations -- Business management Theses -- Business management Assignments -- Business management |
| url | http://hdl.handle.net/10019.1/3469 |
| work_keys_str_mv | AT mokenelalehlohonolo managerialflexibilityusingrovasurveyoftop40jselistedcompanies |