Valutation of intangible assets with real options: a case study in a technology transfer from the Federal University of Minas Gerais

The aim of this study was to compare the results of the valuation of intangible assets by the real options approach, based on the Black and Scholes model, with the discounted cash flow method, in the context of a software developed at the Federal University of Minas Gerais. The flexibilities considered in the development of the work were the abandonment option and the option to extend the licensing agreement. The results showed that the real options model fits better to this scenario, since it incorporates the existing options from the moment of Research and Development until the end of the licensing and protection of the technology. The expected value from the real options perspective was statistically higher than the expected value from the traditional cash flow perspective. This result showed that the contingencies related to the case study are relevant and should be incorporated into a valuation process. The greater proximity of this value to reality represents benefits both for the university and for the company. In addition, it is important to highlight that a protected technology can create a great competitive advantage, and that the gains from the exploitation of this knowledge can go far beyond the financial ones.