Research On Corporation Financing Based On The Option Theory

The financing is one of the most important activities in corporation. All financial management of corporation is around the funds. For long time, the corporation financing theories has been the problem that the economists study. However, with the booming development that the current financial engineering , and the market that business corporation face compete more vigorous, financing environment and financing outlets will become more complicated necessarily. It will be put forward the higher request for corporation financial analysis and the financing decision.With the option extensive but fruitfully applied, many researchers carry on studying the option-pricing, for example B-S model. This paper applies the option theories to financing of the corporation, and introduces application of applying in such as capital structure, the financing risk and cost, and the financing tool. This paper mainly includes two parts.This paper of the first part is composed of chapter 1, chapter 2 and chapter 3.At chapter 1, author introduces the basic characteristics of the option and main theories fruit firstly. Then author evaluates theories fruit. The part is the theories foundation of the paper. At chapter 2, paper leads option theory into to the analysis of corporation financing, and emphasize to analyze the option characteristic of the corporation owners' equity capital and the obligation capital, which is the theories of the further analysis financing.The second part is composed of chapter 4, chapter 5, and chapter 6. At the part, paper discussed application of the option theories in corporation financing from two aspects combining with Nanjing Oil Transport Corporation. At chapter 4, the paper establishes capital structure model and index of measuring financing risk by way of B-S model, and tries to search a new way for capital structure of corporation. At chapter 5, the paper analyzes financing risk of corporation base on option, and establishes index of measuring financing risk by way of B-S model, and discusses how to control financing risk and cost of corporation from issuing fixed-incoming securities being of attributes of option and using interest rate option. At chapter 6, author analyzes attributes of option of financing tools, and explains that option can advances level of decision-making of corporation.Author summarize to paper at chapter 7. Though our country so far still not has the condition of some derivative financial instruments of usage, option provides a kind of innovation choice for corporation in financing process.