CIRJE-J-57. Kobayashi, Takao, "A New Dimension of Equity Analysis and Valuation", June 2001.

I discuss recent methodological trends in equity analysis and valuation. Specifically, I address concepts and frameworks regarding (a)the real options approach and (b)behavioral finance, how they relate to more traditional approach such as dividend/ cashflow discount models and models based on EVA, and their implications for the investment decision-making process, as well as advantages and disadvantages of the approach.