The Research On The Evaluation Of Enterprise Value Based On B-S Option Pricing Model

In finance, investment and other areas, the research of value assessment can be seen everywhere. In economic activities, assets appraisal as the pilot work of enterprise management and investment behavior, plays a very important role in the procedure. This is because both the physical assets and financial assets has its value, in order to manage these assets successfully,it is necessary to comprehend the value of these assets and its value measurement method. With the rapid development of China economy, the merger and reorganization of enterprises have become more frequent, the demand of evaluation of enterprise market valuation is also increasing. It put forward higher requirements on the enterprise value appraisal method system in the same time.In the economic life, the acquisition of equity, mergers and other behavior need assess the value of the enterprise. It is foreseeable that enterprise value assessment will become an important part of asset appraisal in the future.Enterprise value evaluation theory and method system has been gradually matured in developed countries currently. As the researches on assessments of the enterprise value has an early start and more standardized market in developed countries, it provide a good environment for enterprise value appraisal practice, so that the valuation theories and methods are relatively matured and practice more widely in application.But in China, Enterprise value evaluation theory researches are not deep enough, evaluation system is not perfect. As studies on evaluation of enterprise value started relatively late and the limited conditions, it has not yet formed a matured theory system in China. Methods to assess the enterprise value mainly include discounted cash flow method, relative valuation method, option pricing method in domestic, most methods have technical limitations and bugs in practice. This paper based on the data of7iron and steel industry listing Corporations, Utilizing the B-S option pricing model to evaluate the enterprise value in recent five years, and compare the result with its market value to draw conclusions. Aims at explaining the objectivity and the stability of the option method, and strengthen its practical application in practice.The primary coverage of this essay constitutes by five parts.The first chapter is the introduction, describes the research background and significance of this study, explains the importance in promoting social and economic development of the assessment of enterprise value,at the same time, describes the arrange the study methods and the structure of this paper.The second chapter describes the theory and methods of enterprise value assessment. First, briefly introduces the theory of enterprise value and enterprise value evaluation theory, and then describes several main enterprise value assessment methods,including discounted cash flow method,economic value added method, cost method, market method and B-S option pricing method.The third chapter mainly introduces the application of B-S option pricing method in the evaluation of enterprise value. First explained the selection criteria of evaluation target, then describes the sources of the data required for the model and the model parameters. Then take model parameter sensitivity analysis, found that the evaluation results of sensitivity to model parameters is low, the model parameters changes doesn’t impact on the assessment results significantly.The main content of the fourth chapter is the test of the market. Using mathematical statistical method to compare and analyze the evaluate the results of chapter third and the current market value, In the conclusion, that the B-S option pricing method is more stable then the market value in evaluation of enterprise value.The fifth chapter of this paper are summarized, recommended to promote the use of option method in evaluation practice of enterprise value, then revealed the shortcomings of this article analyzes.