Study On Application Of The Real Options In Venture Investment Decision

This paper stated the history and present condition of the real options theories and the venture investment decision theories, analyzed the advantageous and application of the real options theories in venture investment decision and the mathematic foundation of real options pricing theories, studied how to choose real options pricing model in venture investment decision practically. This paper tried to expand the research finally, and gave a simplification application model. The text can be divided into five parts totally.First, this paper described the domestic and international synopsis history and the present condition of the real options theories. Then expatiated development of the options and the real options and the general thought in theory of options pricing in certain space. In chapter 3, stated the mechanism and decision problems in venture investment simply, emphasized the blemish inside traditional investment decision analysis method. In chapter 4, combined real options theory and venture investment decision, then analyzed the real options embodied in each stage of venture investment project, discussed the mathematical principle when real options evaluates the venture investment project.In chapter 5, this paper made track mathematically for origins of main classic models in the real options and differed from their application. At the end of this chapter, using the decision tree, the binomial options-pricing model and programming approach is employed under uncertain conditions to develop a venture investment decision model to serve the investment objective of maximizing the net present value. The model properly evaluates the venture investment opportunity, effectively demonstrates the behavior of venture capitalist in determination of investing time and duration.In chapter 6, discussed the compound options of many stages in venture investment first, and gave a simply model based on risk resolving. Analytic result in substantial evidence enunciation that model was certainly creative and practical. In section 4, put forward some standpoints about the shortcomings when the real options viewing the vestment investment project.At the end of the paper, summed the present condition of real options applying to vestment investment decision in our country,considered that we should be urgent to promote the real options. Finally, this paper gave the outlook for the real options theories' application in our country.