To expand on our thoughts about growth options and intangible assets, we have published a new in-depth piece on the subject.

When attempting to gain insight into the valuation of a company, there are three important distinctions to bear in mind: (1) the difference between book and market values, (2) the difference between the value of the tangible capital that appears on the balance sheet and the value of the internally generated intangibles that do not, and (3) the difference between the value of assets in place and the value of growth options. Here we examine these distinctions using the example for Alphabet, a company for which intangibles and growth options are a critical source of value.

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