Research On The Real Option Pricing Method Of Acquired Corporation And Its Application

To survive and develop in today's tough and competive marketing enviroment, more and more enterprises would probably adopt the strategies of acquisition and merger. Therefore, this paper focuses on a core issue in acquisition- acquired corporation pricing and attempts to present some new pricing methods for acquired corporation.This paper initially reviewed and summarized some previous prevalent pricing methods and analyzing some currently prevalent pricing methods and their features. Then this paper lay particular emphasis on the various value factors and how they influence the pricing process of acquired corporation. Subsequently, this paper studied on the implicit theory of real option. In light of acquired corporation pricing this paper adopt the theory of real option and make use of its advantage of securing information from the financial market. This paper propose the implied fluctuation rate-based pricing model which avoid the subjectivity of conversion rate by means of discount. After analyzing several examples, the paper presents that taking advantage of the information from the financial and acquisition market able acquired corporation pricing to effectively avoid over or undervaluation. Taking dynamic duplication of real option into consideration, this paper analyze the real option in investment-based acquisition and present the method of "acquisition premium" for reasonable assessment of acquired corporation, based upon which valuation model of acquired corporation was established. The two models mentioned above make studies on the real option in acquisition investment from different angles and point out the significance of the real option in measuring and controlling acquisition risks.