This study aims to contribute a better understanding of real options. My extensive elaboration distinguishes types of real options, classification for corporate real growth options, real options with market and private risks, real options as a complement, functions of real options, real options on project-level and management-level. Moreover, it addresses and elaborates on several noteworthy valuation approaches and it combines real options analysis with DCF method. In addition, a practitioner’s guide for company valuation and a four step process for valuing real options are elaborated in depth.