Abstract: In some cases, option theory is believed to be superior to the naïve discounted cash flow approach to valuation because it captures the value of real options arising from managerial and strategic flexibility. The scope of this paper is to investigate the extend to which company valuation of listed companies is associated with the existence of real options, by linking Ohlson Residual Income model to real option theory. The study evaluates the real options of companies listed on the Athens Stock Exchange during the time period of January 1992 to December 1998. This time period is considered as the most considerable one in the history of the Greek Capital market. Also, plans and decisions about company-wide capital expenditure and about specific projects are included into the sample. The research indicates that the growth options are a significant explanatory variable in the context of the residual income valuation model. The results provide, also, some support of the predictive ability of the residual income model and are generally in line with findings from UK and USA researchers. Moreover, the findings are promising, because they reveal that market valuation practices and the real option theory converge in the case of the growth options.