Research On Enterprise Valuation Of China Film Co.,Ltd Based On Real Option Pricing Method

Over the past decade,thanks to the support of industrial policies and the development of national economy,C hina's film industry has achieved leapfrog development,and China's film market has also become the world's second largest film market.In this process,film enterprises have entered the capital market for further development,and the capital operation behaviors targeted at film enterprises are increasingly frequent,so the enterprise management and more a nd more investors begin to pay attention to the enterprise value assessment.Different from traditional enterprises,the profits of film enterprises all depend on the preferences of the market,and the management needs to constantly adjust the business str ategy to adapt to the changes in the business environment.However,traditional valuation methods usually assume that the development of the market and the enterprise is stable,and the management will not change after making decisions.Therefore,traditio nal valuation methods cannot reasonably evaluate the value of film enterprises.The real option pricing method can make up the deficiency of the traditional valuation method,so we try to combine the real option pricing method with the traditional valuatio n method,in order to make a beneficial attempt to the practical operation of film enterprise valuation.Considering that C hina film co.,ltd.is the only listed company operating the whole film industry chain,its development is greatly affected by the uncertainty of the business environment,so it is typical.Therefore,this paper takes C hina film co.,ltd.as an example and evaluates the enterprise value of C hina film co.,ltd.by using the real option pricing method.This paper first analyzes the operat ing conditions of China film co.,LTD.,which lays a foundation for the discussion on the suitability of valuation methods and the estimation of valuation model parameters.Then the paper discusses the advantages of the real option pricing method in the enterprise value evaluation of C hina film co.Next,we construct the enterprise valuation model combining the free cash flow discount method and the Black-scholes model.Then we compare the estimated theoretical stock price with the actual stock price and verify the validity of the valuation model.Finally,based on the problems found in the process of valuation,we put forward four Suggestions for enterprises to help them improve their value.The analysis results show that the real option pricing method is more suitable for evaluating the film enterprise value,and the film enterprise value evaluation model constructed by us is effective.We hope this research can provide help for the investors of film enterprises and provide a reasonable basis for the manage ment of film enterprises to implement value management.