Investment And Financing Behavior Of Option-based Companies

At present, companies base their investment and financing on thecommon basic financial instruments. But, with the development ofderivative financial instruments, corporate investment and financing willundoubtedly be confronted with changes and opportunities. This thesisresearches into the new phenomenon under the background of option,which is a branch of the derivatives. Meanwhile, this thesis is to proposesome advice on the corporate investment and financing under such abackground. Content and Ideas This thesis begins with examining the essence of option, andexamines the internal relation between corporate investment &financingand option. Based on the above research, this thesis stretches into theapplication of financial option in running the working capital/thelong-term investment &financing and the application of real option inthe evaluation of long-term project investment. Such a process is theone which analyzes the opportunities confronting corporate investment&financing and the potential changes under such background as option.Thus, some advice on corporate investment &financing will be proposed,which means the end of the thesis. This thesis is mainly divided into two parts as introduction and text. Introduction: this part mainly describes the motivation, object,fields, relative researches, the ground theories and analysis, design ofresearch, research methods and the signification of the research. Text: this part is composed of five parts, which are described as theinternal relation between option and corporate investment &financing,application of option in running working capital, development ofcorporate long-term investment &financing under the background offinancial option, development of corporate project investment under thebackground of real option, and the innovation of corporate investment&financing management. Part one: the internal relation between option and corporateinvestment &financing. This part begins with analyzing the essence ofcorporate investment &financing, through which the corporateinvestment is described as the behavior of realizing the financial targetwithin the double restriction of concept environment and techniqueenvironment. Then, a thorough research into the option is madeincluding its essence, its limits, its behavior way. And the conclusion isthat option is the syntheses of financial concept and financial instrument,which is just the ground theory as the internal relation between optionand corporate investment &financing. Further, the research around theabove relation is carried out thoroughly and the conclusion is drawn asfollowed: option meets the real need of corporate investment &financing;option meets the need of corporate investment &financing flexibility;option meets is of great use to the rebuilding of corporate investment&financing. Shortly, the opportunity confronting the corporateinvestment &financing under the background of option may be definedas followed: firstly, as a derivative, option provides a new object forcorporate investment &financing, widening the channel of corporateinvestment &financing; secondly, as a method of evaluating, provide afresh idea for corporate strategic investment &financing. And at the endof this part, this thesis emphasize on the internal relation between optionand corporate investment &financing. Part two: application of option in running working capital. Formthis part on, the thesis is to examine the opportunity confrontingcorporate investment &financing under the background of option. Thispart focuses the research on the positive effect of option on the workingcapital running. Firstly, the effect of option on working capitalinvestment is examined. Based on the review of traditional theory ofworking capital investment, the constructive value of the traditionaltheory is appreciated. Then, regarding the development of capital market,the traditional theory will be developed, and in the developed theoryliquid assets will be divided into another two parts as basic liquid assets(liquid assets of first level) and ready liquid...