Abstract
ABSTRACTThis paper extends Couto, Gualter, Cláudia Nunes, and Pedro Pimentel [(2015). ‘High-speed Rail Transport Valuation and Conjuncture Shocks.’ European Journal of Finance 21(10–11): 791–805] high-speed rail (HSR) transport valuation framework using real options analysis to embrace the stochastic investment costs. Optimal timing to invest, value of the option to defer, and investment opportunity value are assessed considering uncertainty about HSR demand and investment expenditures, both following a geometric Brownian motion with jumps driven by Poisson processes. The numerical results show consistency with the results presented in Couto, Nunes, and Pimentel (2015).
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