Abstract
This study applies the real options model of Capozza and Li (2002) to evaluate both the investment value of an urban land readjustment project and the optimal timing of initiating such development. Using the project of Fongshan City readjustment as sample, we evidence the readjustment project is valuable and should be undertaken. We also show that results estimated by real options model are more stable and consistent than those by NPV approach.
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