The Value Of Investment Options Analysis Based On Environmental Risk

The real options approach is a method has been accepted by more and more investors for valuing project. Using real options approach to valuing investment decision flexibilities is a new research trend in financial economics and management science. In recent years, the rapid development of capital industry, which provides the real options approach very rich background research. This article uses the stochastic analysis method, has systematically studied in each kind of situation time power appraisal, gives the appraisal result, and develops in the appraisal foundation most superior decision analysis.First this article studied the investor to invest the initial period not to consider the environment risk; the findings have given investor's most superior investment rule. Simultaneously this article has also analyzed some parameters'influence to the opportunities for investment value and the investment threshold value.Next, our supposition is in the items of basic construction initial period, the investor already has considered the environment risk (e.g. the forests'fire risk), and considers the environment factor of the project in the value appraisal, moreover this kind of factor was uncertainty, because all of us are unable to expect the environmental factor will bring how much influence to the project value, therefore we obtained the investment value and the investment threshold value by using the real options method. Simultaneously we have also analyzed the undulation rate and the repayment rate's influence to the investment value and the investment threshold value. The analysis result and our standard options priced model conclusion are no longer same.Finally, we discussed one kind of new thought in the recent years: Environment bonds. The environment bonds involves to the government and the enterprise investor's gambling question, therefore in the fourth chapter we will be able emphatically to discuss the gambling equilibrium between the two.