APPLICATION OF PROJECT VALUATION USING REAL OPTIONS WITH LEARNING PROCESS AND TRINOMIAL TREE IN PT VALE INDONESIA TBK

• Main Author: Alexander F. Yoshuara, Richard
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/81836
• Institution: Institut Teknologi Bandung

PT Vale Indonesia Tbk is a company in the nickel mining sector which has become a public company in the Indonesia Stock Exchange with the ticker code INCO. It is very important to carry out financial projections or modeling to assess the valuation of an investment in a project. The most common method used for valuing a company or project is the Discounted Cash Flow (DCF) method. However, the DCF method is very vulnerable to changes in market conditions which in practice have high volatility, especially in the commodity industry. Therefore, real options is applied in evaluating the project value of PT Vale Indonesia Tbk. In this research, INCO projects will be valued using real options with the learning process method and trinomial trees. The application of this method is possible to add value to the project so that decisions can be reviewed to obtain optimal valuation.