Application Of Real Options Theory In The Enterprise's Investment Decision-Making

With the research combined with theoretical analysis and empirical study, at the foundation of essential characteristic, value source and risk types, the thesis gives an analysis on the defect of traditional investment decision method under the environment of high risks and high uncertainty and offer a new measure to make up the defect--real options. With the contrast of two methods on the practice investment cases, the author brings forward a general analysis framework and calculation process of the real options investment decision-making under the environment of uncertainty and analyze the sensitivity of some important factors. The research mainly consists of those jobs: With the regression of the stock rate of return of public companies and market rate of return by Excel, the author calculates the beta of the companies and the volatility of the assets with the collection of the historical data of the comparable companies. On the aspect of forecast of the future expectant cash flow of the companies, the author applies sales percentage and sales growth rate. In order to calculate the values of the compound options, analyze the sensitivity of the key factors and offer a quantitative basis for the investor, the binomial tree model is adopted to constitute binary tree grid chart.In the first chapter, the author gives a general presentation of the issues to be studied, the study train of thought and means and the research achievement both in domestic and overseas. In the second chapter, the author expatiates the basal theory of investment decision,present the essences and characters of investment and analyze the uncertainty of investment. With the analysis of the basis principles and process of decision-making of traditional decision methods, the author put forward the defect of the traditional methods in the third chapter. In the next chapter, the basis thought of options, analysis of process of decision, types of real options, pricing model and analysis framework is presented systematically, with the contrast of real options method and traditional methods, the author analyzes the application scope and limitations. Chapter 5 is the focal point of the thesis, with the contrast of the two methods applied in the practice investment project, the author proves the rationality of the real options method. The last chapter is the conclusion of the studies.The conclusion of the analysis is: under the uncertainty environment, real options measure can reflect the value of flexibility distinctly and it is a scientific decision method.