Strategy is ultimately aimed at creating shareholder value. We examine the relationship among intrinsic (DCF) value, market value, and the value of growth options using a “perfect foresight” model. Our findings suggest that Kester's (1984) initial assessment of growth option values may not...

In this paper, we consider the relationship between the investment decision process and returns to investments in capabilities. We draw on characteristics of capabilities to develop a framework that identifies four components of the returns to an investment that are derived from industry-based...