The Review Of The Application Of Real Option Theory In Evaluating The Value Of Enterprises

With the mixture of economy and finance,globalization and under the rapid development of high-new technology focusing on information technology,enterprise valuation is expanded extremely in its application.At the same time,the traditional methods of enterprise valuation are challenged severely.The emergence and development of real options theory provides an over-new way to value the rapid growth enterprise with high uncertainty,which not only remedy the deficiency of the traditional methods,but also cater to the need of the age.This paper analyses the advantages of real option in the insight into the potential value and discusses the application of real option in evaluating the value of enterprises under uncertainty. In the study,real option is seen through from all-round positions,which shows in across-subject horizontal study,vertical thorough investigation and convergence on its contribution to improve the value finally.On the basis,the paper tries to apply Schwartz & Moon real option pricing model to evaluate the value of enterprises under uncertainty.In the applying process,we use Monte Carlo numerical method to simulate the future cash flow and dynamic stochastic process to denote the uncertainty of the enterprises.Besides,we introduce quasi-Monte Carlo method to improve the efficiency when applying Monte Carlo method.In this paper,we simplify Schwartz & Moon pricing model according to the case company and revise the estimation of parameters.By comprehensive analysis,real option theory offered a new systematic thinking manner for enterprise evaluation.But,this innovation stress a new evaluation concept and given applicability other than precise evaluation on technical part.