Shareholder Option Valuation in Mezzanine Financing Applied to CO2 Reduction in Sustainable Infrastructure Projects: Application to a Tunnel Road in Medellin, Colombia
Round 1
Reviewer 1 Report
The authors reveal an enormous lack of care when writing and structuring the paper. Some (among the many) examples:
a) lines 31-38 are some general instructions for an introduction and should not be in the final versions of the paper!
b) a similar comment about lines 44-47
c) the presentation of paper structure is missing in the end of Introduction;
d) why the reference to the Roman Empire (line 75)?
e) if equity is 30% how can debt stay between 70%-90%? (lines 98-99)
f) basics about the NPV should be avoided (lines 163-169)
g) "It is essential to highlight that the use of the real options is not a duty is"; what do you mean? (line 174);
h) Paragraph appearing in lines 195-201 is precisely the same as in lines 188-194
i) "The project is based on the model proposed by González-Ruiz et al. [150],..." but there is no reference [150]!!! (line 216);
j) the English writing must be much improved.
Author Response
Shareholder option valuation in mezzanine financing applied to CO2 reduction in sustainable infrastructure projects: Application to a tunnel road in Medellin, Colombia
Manuscript ID: Sustainability-1673861
Authors’ comments to the referee 1
We are very grateful for the comments and constructive suggestions raised by the reviewer. We have reviewed all comments carefully and thus; the manuscript has revised accordingly. Also, we follow the strictest academic standards and research procedures for this kind of study. We thank the reviewer for his/her time and effort in reviewing the manuscript, and we are pleased that he/she agrees that the paper meets academic standards for publication. The manuscript has been carefully reviewed by an experienced editor -ENAGO- whose first language is English and who specializes in editing papers written by scientists whose native language is not English.
a) lines 31-38 are some general instructions for an introduction and should not be in the final versions of the paper!
Answer: The lines were removed.
b) a similar comment about lines 44-47
Answer: The lines were removed.
c) the presentation of paper structure is missing in the end of Introduction.
Answer: The paper's structure was added.
d) why the reference to the Roman Empire (line 75)?
Answer: The lines were removed.
e) if equity is 30% how can debt stay between 70%-90%? (lines 98-99)
Answer: This issue was improved. See lines 86-87.
f) basics about the NPV should be avoided (lines 163-169)
Answer: The lines were removed.
g) "It is essential to highlight that the use of the real options is not a duty is"; what do you mean? (line 174);
Answer: This paragraph has been improved. See lines 159-164.
h) Paragraph appearing in lines 195-201 is precisely the same as in lines 188-194
Answer: The lines were removed.
i) "The project is based on the model proposed by González-Ruiz et al. [150],..." but there is no reference [150]!!! (line 216).
Answer: Reference has been checked. The right number is 1.
j) the English writing must be much improved.
Answer: The manuscript has been carefully reviewed by an experienced editor -ENAGO- whose first language is English and who specializes in editing papers written by scientists whose native language is not English.
Again, thank you very much for your constructive comments. The paper has benefited significantly from your helpful suggestions. We recognize the importance of your contributions in a footnote at the end of the paper. We hope that you find this new version to be suitable for publication.
Reviewer 2 Report
The article „Shareholder option valuation in mezzanine financing applied to CO2 reduction in sustainable infrastructures projects: Application to a tunnel road in Medellin, Colombia” compares three alternatives as target infrastructures specifically for stretches of road. The authors proposes a model to exercise a decision option that allows a lender to become a project shareholder through mezzanine financing. The topic of the article is mainly related to economics sciences and deals with the financing of infrastructure investments. The title of the article corresponds to its content. But it is unclear why the word “application” is written with capital letter in the title of the article – it seems to be wrong.
The abstract and keywords also match the content of the article. The abstract outlines the contribution of the paper (the research design, the methods and procedures employed, the main outcomes and results). This part of the article includes key findings and is an appropriate length. However, keywords should not be written with capital letters.
The purpose of the article is not clearly stated. The purpose of the article can be guessed from the abstract. The purpose of the article should be in the introduction, where its obvious place is. The purpose of the article as presented in the abstract and in the introduction should read the same. In the current version of the article, the goal is partly to be found on lines 231-232 and 275-276.
The introduction is effective, clear and well organized. This section introduce and put into perspective what follows. But I suggest develop a background indicating a research gap and present what is novel and why it is significant. A gap in knowledge is not identified.
A major problem for the reader is the lack of attention to the text of the article. Already at the very beginning (lines 31-39) a text from the MDPI publisher's instruction appears. Then two paragraphs of the text were repeated (lines 188-194 and 195-201). Such errors should not appear in a scientific article. I always recommend authors to read the entire text before sending it to the publisher.
The scope and manner of using the literature on the subject are not objectionable. But the cited references are not current. Only 28% of the cited sources are from the last six years.
The general structure of the reviewed article is correct. The order of the individual subsections and the content presented in them are also correct. The research methods used by the authors are appropriate. Unfortunately, the research method applied is not clearly stated. The reader suspects that this is a case study. The description of the method should definitely be supplemented. There is also no description of the limitations in the studies carried out.
I rate positively the publication content (placing the problem in the right context) and the formal correctness (formulas, algorithms). But the authors did not formulate research questions or hypotheses, which decreases the scientific value of the article.
Stages of description, analysis and interpretation are properly carried out. Illustrative material is logically related to the article. The figures and tables are appropriate and properly show the data.
Conclusion should be developed and indicate advantages and limitations. Currently, the conclusions are described rather imprecisely. It is difficult for the reader to grasp the thoughts of the authors. In my opinion, the text describing the conclusions is inexact.
The conclusions are supported by research results. The assumptions formulated for the purpose of work have been implemented. The formulated conclusions are important for practice, although the article does not directly bring new knowledge to science.
The language of the article corresponds to the correctness criteria used in scientific statements. The language is clear. But I do not feel an expert in assessing the language quality of the article. I suggest having the manuscript proof read and edited before submitting.
The bibliography has not been prepared in accordance with the publisher's guidelines. Some carelessness in the preparation of the list of references is evident.
The article meets the requirements of this type of publication. The research methods used may be of interest to other researchers and with appropriate modification can be used for further research. The advantage of the article is also linking the studied issues with the concept of sustainable development. The article fits into the theme of Sustainability.
Author Response
Shareholder option valuation in mezzanine financing applied to CO2 reduction in sustainable infrastructure projects: Application to a tunnel road in Medellin, Colombia
Manuscript ID: Sustainability-1673861
Authors’ comments to the referee 2
We are very grateful for the comments and constructive suggestions raised by the reviewer. We have reviewed all comments carefully and thus; the manuscript has revised accordingly. Also, we follow the strictest academic standards and research procedures for this kind of study. We thank the reviewer for his/her time and effort in reviewing the manuscript, and we are pleased that he/she agrees that the paper meets academic standards for publication. The manuscript has been carefully reviewed by an experienced editor -ENAGO- whose first language is English and who specializes in editing papers written by scientists whose native language is not English.
Author's comments to reviewer 2
1. The article „Shareholder option valuation in mezzanine financing applied to CO2 reduction in sustainable infrastructures projects: Application to a tunnel road in Medellin, Colombia” compares three alternatives as target infrastructures specifically for stretches of road. The authors proposes a model to exercise a decision option that allows a lender to become a project shareholder through mezzanine financing. The topic of the article is mainly related to economics sciences and deals with the financing of infrastructure investments. The title of the article corresponds to its content. But it is unclear why the word “application” is written with capital letter in the title of the article – it seems to be wrong.
Answer: Thank you for your valuable comment. The title has been improved. See lines 1-3
2. The abstract and keywords also match the content of the article. The abstract outlines the contribution of the paper (the research design, the methods and procedures employed, the main outcomes and results). This part of the article includes key findings and is an appropriate length. However, keywords should not be written with capital letters.
Answer: Thank you for your valuable comment. This issue has been improved.
3. The purpose of the article is not clearly stated. The purpose of the article can be guessed from the abstract. The purpose of the article should be in the introduction, where its obvious place is. The purpose of the article as presented in the abstract and in the introduction should read the same. In the current version of the article, the goal is partly to be found on lines 231-232 and 275-276.
Answer: This issue has been improved. See lines 16-18 and 55-57.
4. The introduction is effective, clear and well organized. This section introduce and put into perspective what follows. But I suggest develop a background indicating a research gap and present what is novel and why it is significant. A gap in knowledge is not identified.
A major problem for the reader is the lack of attention to the text of the article. Already at the very beginning (lines 31-39) a text from the MDPI publisher's instruction appears. Then two paragraphs of the text were repeated (lines 188-194 and 195-201). Such errors should not appear in a scientific article. I always recommend authors to read the entire text before sending it to the publisher.
Answer: Thank you for your valuable comment. This issue was checked and improved.
5. The scope and manner of using the literature on the subject are not objectionable. But the cited references are not current. Only 28% of the cited sources are from the last six years.
Answer: We appreciate your valuable comment. Papers cited are the most valuable in the area.
6. The general structure of the reviewed article is correct. The order of the individual subsections and the content presented in them are also correct. The research methods used by the authors are appropriate. Unfortunately, the research method applied is not clearly stated. The reader suspects that this is a case study. The description of the method should definitely be supplemented. There is also no description of the limitations in the studies carried out.
Answer: We appreciate your valuable comment. Materials and Methods section has been improved, see lines 211-214. Particularly, limitations can be seen from lines 431 to 433.
7. Stages of description, analysis and interpretation are properly carried out. Illustrative material is logically related to the article. The figures and tables are appropriate and properly show the data.
Answer: We appreciate your valuable comment
8. Conclusion should be developed and indicate advantages and limitations. Currently, the conclusions are described rather imprecisely. It is difficult for the reader to grasp the thoughts of the authors. In my opinion, the text describing the conclusions is inexact.
Answer: We appreciate your valuable comment. This issue has been improved, see lines 400-435.
9. The conclusions are supported by research results. The assumptions formulated for the purpose of work have been implemented. The formulated conclusions are important for practice, although the article does not directly bring new knowledge to science.
Answer: We appreciate your valuable comment.
10. The language of the article corresponds to the correctness criteria used in scientific statements. The language is clear. But I do not feel an expert in assessing the language quality of the article. I suggest having the manuscript proof read and edited before submitting.
Answer: The manuscript has been carefully reviewed by an experienced editor -ENAGO- whose first language is English and who specializes in editing papers written by scientists whose native language is not English.
11. The bibliography has not been prepared in accordance with the publisher's guidelines. Some carelessness in the preparation of the list of references is evident.
Answer: We appreciate your valuable comment. This issue has been improved.
12. The article meets the requirements of this type of publication. The research methods used may be of interest to other researchers and with appropriate modification can be used for further research. The advantage of the article is also linking the studied issues with the concept of sustainable development. The article fits into the theme of Sustainability.
Answer: We appreciate your valuable comment.
Again, thank you very much for your constructive comments. The paper has benefited significantly from your helpful suggestions. We recognize the importance of your contributions in a footnote at the end of the paper. We hope that you find this new version to be suitable for publication
Reviewer 3 Report
The paper presents an interesting idea and the authors have done a good analysis. However, there are very clear issues with the document that need to be address and the document needs to be thoroughly proofread. I think that the presentation let the authors a bit down after an interesting analysis.
Major comments
- I think that the authors did not proofread the document. This can be seen for instance in the introduction with the following text:
“The introduction should briefly place the study in a broad context and highlight why 31 it is important. It should define the purpose of the work and its significance. The current state of the research field should be carefully reviewed and key publications cited. Please highlight controversial and diverging hypotheses when necessary. Finally, briefly mention the main aim of the work and highlight the principal conclusions. As far as possible, 35 please keep the introduction comprehensible to scientists outside your particular field of research. References should be numbered in order of appearance and indicated by a numeral or numerals in square brackets—e.g., [1] or [2,3], or [4–6]. See the end of the document for further details on references.”
I am guessing that this text from the template.
- Some of the sentences are difficult to understand:
“This study preserves the structure for implementing mezzanine financing and plans to value the option of becoming a shareholder, which has a lender, by providing debt capital through PF schemes.”
- In the conclusions section there needs to be a general conclusion of how this situation is applicable to other cases (generalization of conlusions)
Minor comments
- Suggest changing how the references appear i.e., change:
equity and debt characteristics [40] [41].
To
equity and debt characteristics [40,41] or [40-41]
This si applicable when the numbers are consecutive like in this case.
- There are typos, such as:
it is important to note that in a25 years
(there should be an space “a 25”)
- Please remove the commas in the following sentence:
Funding: “This research received no external funding”
Should be:
Funding: This research received no external funding
- The document should be reviewed for grammatical issues
Comments for author File: 
Comments.pdf
Author Response
Shareholder option valuation in mezzanine financing applied to CO2 reduction in sustainable infrastructure projects: Application to a tunnel road in Medellin, Colombia
Manuscript ID: Sustainability-1673861
Authors’ comments to the referee 3
We are very grateful for the comments and constructive suggestions raised by the reviewer. We have reviewed all comments carefully and thus; the manuscript has revised accordingly. Also, we follow the strictest academic standards and research procedures for this kind of study. We thank the reviewer for his/her time and effort in reviewing the manuscript, and we are pleased that he/she agrees that the paper meets academic standards for publication. The manuscript has been carefully reviewed by an experienced editor -ENAGO- whose first language is English and who specializes in editing papers written by scientists whose native language is not English.
Authors’ Comments to Reviewer 3
1. The paper presents an interesting idea and the authors have done a good analysis. However, there are very clear issues with the document that need to be address and the document needs to be thoroughly proofread. I think that the presentation let the authors a bit down after an interesting analysis.
Answer: We appreciate the valuable comment.
Major comments
- I think that the authors did not proofread the document. This can be seen for instance in the introduction with the following text:
“The introduction should briefly place the study in a broad context and highlight why 31 it is important. It should define the purpose of the work and its significance. The current state of the research field should be carefully reviewed and key publications cited. Please highlight controversial and diverging hypotheses when necessary. Finally, briefly mention the main aim of the work and highlight the principal conclusions. As far as possible, 35 please keep the introduction comprehensible to scientists outside your particular field of research. References should be numbered in order of appearance and indicated by a numeral or numerals in square brackets—e.g., [1] or [2,3], or [4–6]. See the end of the document for further details on references.”
I am guessing that this text from the template.
Answer: We appreciate the valuable comment. This paragraph has been removed.
2. Some of the sentences are difficult to understand:
“This study preserves the structure for implementing mezzanine financing and plans to value the option of becoming a shareholder, which has a lender, by providing debt capital through PF schemes.”
Answer: The manuscript has been carefully reviewed by an experienced editor -ENAGO- whose first language is English and who specializes in editing papers written by scientists whose native language is not English.
3. In the conclusions section there needs to be a general conclusion of how this situation is applicable to other cases (generalization of conlusions)
Answer: We appreciate the valuable comment. The Conclusions' section has been improved.
Minor comments
4. Suggest changing how the references appear i.e., change:
equity and debt characteristics [40] [41].
To
equity and debt characteristics [40,41] or [40-41]
This si applicable when the numbers are consecutive like in this case.
There are typos, such as:
it is important to note that in a25 years
(there should be an space “a 25”)
Answer: We appreciate the valuable comment. This issue has been improved.
5. Please remove the commas in the following sentence:
Funding: “This research received no external funding”
Should be:
Funding: This research received no external funding
Answer: We appreciate the valuable comment. This issue has been improved.
6. The document should be reviewed for grammatical issues.
Answer: The manuscript has been carefully reviewed by an experienced editor -ENAGO- whose first language is English and who specializes in editing papers written by scientists whose native language is not English.
Round 2
Reviewer 2 Report
The article „Shareholder option valuation in mezzanine financing applied to CO2 reduction in sustainable infrastructures projects: application to a tunnel road in Medellin, Colombia” compares three alternatives as target infrastructures specifically for stretches of road. The Authors proposed a model to exercise a decision option that allows a lender to become a project shareholder through mezzanine financing. The Authors have made the following changes to the content of the article as recommended in the review, including:
- the title and keywords have been improved,
- the purpose of the article was clearly stated,
- the whole article was checked and improved,
- Materials and Methods section has been improved,
- Conclusion section was developed and indicated advantages and limitations.
The changes made have increased the scientific value of the article. In summary, the article meets the minimum requirements for this type of publication. In my opinion the paper will not attract a wide readership and be of interest only to a limited number of people.
Reviewer 3 Report
After the changes, I am satisfied with the paper. I would suggest carefully checking formatting and spelling iss
