The Application Of Compound Options Model In Multi-stage Investment

In the process of the management enterprises need to make their investment decision inan uncertain environment. However, the traditional investment methods have been unableto adapt to the contemporary needs of investment, enterprises lose some valuableinvestment opportunities by overlooking some uncertainties and underestimating values ofthe project. Receipts Tax for enterprise investment projects of a more detailed, morerational approach to decision-making investors the flexibility to invest in the externalenvironment and the uncertainty of a more concrete understanding.From the perspective of real option this paper analyzes investment decisions, as well asmaking up the deficiencies of traditional methods. Based on the theories ofdecision-makings of project investment, the paper analyzes the limitations of the traditionalevaluation methods and the characteristics of the real investment, then on the basis of theBlack-Scholes model, under the guidance of Geske model opinions which calculate thejoint executed possibility, by the following steps this paper sets up the composite model ofreal option by considering their influences on different stages the impact of the delay of thecosts: The first step is to set up a borderline of delaying the option, make it clear a bestexecution point. Then be different stages of the Joint Implementation options probabilitycalculation options to the mutual influence. Second, the delay cost components divisionmade, the corresponding quantitative formula, and its variables as a first step towards theintroduction of the compound option model, Calculating the project has been true valueformula. The third step analysis using Matlab compound value of the options on thesensitivity of the variable. And on the basis of normal sensitivity analysis, this paperanalysis the sensitivity of two variables at the same time.