In this article, we study the situation, where by partial privatization a private company is given the opportunity to invest into a government owned business. After payment of an initial instalment cost, the private company's investments are flexible within a range $[0,k]$ until the business is...

We analyze how the presence of financial markets effects the optimal exercise of real options for a risk averse agent. In this process we examine the role of the minimal martingale measure and the Capital Asset Pricing Model (CAPM). Using value-matching and smooth-pasting conditions, we...