The Real Option Method Of Real Estate Development Project

Mainly discussed in this thesis is how modern real estate development enterprises apply the new investment decision approach, namely, the real option approach to their projects.The real option approach is the forefront in current investment decision research field. Presently, there is much research on the real option approach theory. However, the research on the application of the method in companies is quite limited, and it is the same for the investment decision of the real estate investment. The scope of the research is narrow, the option to deter and option to staged investment of the based on B-S model are mainly discussed. There is little research on the chance of the investment in option to deter and so few studies in composite option. However, in another opinion, the thesis emphases on the option to deter based on binomial option pricing model, and research on the opportunity to invest through the model. On the other hand, the option to grow based on the B-S model is also the core of the thesis. The thesis will make up the shortage in the aspect and offer guidance for the investment decision practices.In this thesis, the research work is developed by surrounding the questions how the real estate enterprises identify the uncertainty in the process of the decision of the real estate and how the real option is used to estimate the uncertainty. The thesis mainly discusses the option to deter based on binomial and the option to grow based on B-S model, and concentrates on building the model and measuring the parameter, in order to apply for real estate investment.