High-tech Enterprise's Value Evaluation Based On Real Option's Theory

Real option has been studied for more than twenties years, it has been widely applied abroad. But in our country, we just begin to study real option. With the development of real option's theory, it has been widely applied in many fields. This paper firstly summarizes the research on the application of real option's theory in the passed ten years. Secondly, the paper discusses the real option's basic theory, evaluation's method and it's future of application. Lastly, the paper combines the characteristic of high-tech enterprise, adopts Schwartz and Moon's (2000) continuous-time model, and uses Monte Carlo simulation to evaluate high-tech enterprise's value, then gives an example of ZTE corporation. From the result, we can see it is close to ZTE corporation's stock price, so it reflects the enterprise's value. By sensitivity analysis, finds the important parameters which affect stock price, and analyzes the reason of difference between the result and the stock price. Because ZTE corporation's representative, the paper comes the conclusion that real option's method can preferably evaluate high-tech enterprise's value.