Foreword	6
	Preface	8
	Contents	10
	List of Abbreviations, Variables, and Functions	14
	1 Introduction	16
	1.1 Research Questions	18
	1.2 Contribution and Main Results	18
	1.3 Structure	20
	2 Portfolio Approach to Real Options	22
	2.1 Motivation of the Portfolio Approach to Real Options	22
	2.2 Implications for Modeling Approach	28
	3 Literature Review	35
	3.1 Financial Portfolio Theory	35
	3.2 Corporate Capital Budgeting	46
	3.3 Financial and Real Options Theory	50
	4 Valuation Model for Portfolios of Real Options	59
	4.1 Model Features	59
	4.2 Binomial Option Pricing	70
	4.3 Real Options Portfolio Model	75
	4.4 Model Extensions	92
	4.5 Model Discussion	97
	5 Numerical Analysis	106
	5.1 Numerical Analysis for Two Underlying Assets	107
	5.2 Extension of the Numerical Analysis to Three Underlying Assets	128
	5.3 Numerical Summary	140
	6 Conclusion	143
	6.1 Summary of Results	143
	6.2 Managerial Implications	147
	6.3 Further Applications and Future Research	148
	References	150
	Index	162
	List of Tables	164
	List of Figures	165