(19) United States
(12) Patent Application Publication (io) Pub. No.: US 2001/0034686 Al
Eder (43) Pub. Date: Oct. 25,2001
(54) METHOD OF AND SYSTEM FOR DEFINING AND MEASURING THE REAL OPTIONS OF A COMMERCIAL ENTERPRISE
(76) Inventor: Jeff Scott Eder, Mill Creek, WA (US)
19108 30th Drive SE
Mill Creek, WA 98012 (US)
(21) Appl. No.: 09/764,068
(22) Filed: Jan. 19, 2001
Related U.S. Application Data
(63) Continuation-in-part ol application No. 08/999,245, filed on Dec. 10, 1997. Continuation-in-part ol application No. 09/358,969, filed on Jul. 22, 1999.
(51) Int. CI.7 G06F 17/60
(52) U.S. CI 705/36; 705/7
An automated system (100) and method for defining and measuring the real options ol a commercial enterprise on a specified valuation date. The real options are evaluated on the basis ol the relative strength ol the elements ol value ol the enterprise. The performance ol the elements ol value are first summarized using composite variables. The elements ol value that cause change in enterprise stock price are then determined. The relative strength ol the causal elements ol value for the enterprise vis a vis its competitors are then calculated. The relative ranking ol the enterprise causal elements ol value is then used in determining the discount rate to be used in real option valuation. The real options are then valued using Black Scholes algorithm.