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Laura Martin: Real Options and the Cable Industry

Introduction

Laura Martin, an equity research analyst for cable stocks, believes that the best way to value cable stocks is through creative methods such as real options and not through more traditional or typical valuation methods such as EBITDA multiples, ROIC analysis and DCF analysis. In 1999 she presented at the Credit Suisse First Boston Broadband conference, where she wanted to portray the message that real options is a superior valuation technique for cable stocks. She also wanted to have the opportunity to demonstrate her knowledge of the drivers of value in the cable industry.

The main reason why Laura Martin argues that real options is the correct method for valuing cable stocks is mainly driven by the evolution that this industry was experimenting. In this time period, cable companies were upgrading their cable infrastructure to have 750 MHz of bandwidth capacity, which left unused bandwidth capacity that could......

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Approximate Word Count: 615
Approximate Pages: 3 (250 words per double-spaced page)

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