Study On DCF Method Basd On Real Options Valuation Of Enterprise Application

With the quickening of economic globalization process. the flowing capital ismore extensive and faster. the restructure activity is fraquent increasingly, such as:enterprise's privatization, jiont venture meger and acquisition.equity transaction riskinvestment ect. hence enterprise valuation plays an important role in restructureactivity.China's enterprise value evaluation and assessment of physical assets aresynchronized,but we use the general methord whicht is historical cost method.ratherthan using the income approach which is intermationally accepted method. Thismehtod can unfavorable help us understand the true value of an enterprise. The assetvaluation standard which was lateest releaset by the ministry of finance and assetvaluation association at November.28.2007. which is certified public value executiveenterprise valueation business. They must on the basis of evaluation object, the type ofvalue collection of data, the other related conditions, the analysis and applicability ofincome approach,market value approach and cost approach and then choose one ormore assets valuation basic method in the light of choose one or more assetsvaluatio.basic method. This article will inquire the limitations and applicability ofincome approach.and the author think we should consider the value of real optionswith practical of the income method.The article fully affirmed the basic position of the cash flow in businessvaluation. The author's view is the enterprise value equals to the total discount of thefree cash flow in the future, Total cash flow discount takes account of not thesustainable development.but also the time value of capital of the enterprise.on the baseof this theory. This thesis applies risk neutral thinking of real option theory intotraditional.discounted cash flow method in order to discuss how to evaluate compainesunder uncertainty. The author's view is that enterprise value shoud be the sum offuture cash flow discounted, which generated by existed assets and business activitiesplus the value of profitable opportunity generated by new investment project.