The Application Of Real Option Model In The Valuation Of The Company's Merger And Acquisition

Option pricing theory more and more widely used in the company's mergers and acquisitions valuation,this paper takes the acquisition of ARM company by the Softbank Group as a case,using the traditional merger theory,traditional pricing method and real option models to evaluate the acquisition value.As a result,we found that the real option method has advantage in the evaluation of acquisition between corporates,and also managers can use the real option method as tools to help them make strategy decision.This paper uses data analysis,the combination of theoretical research and case study,the specific route is as follows: the first chapter expounds the research background and the significance of this study,reviews and evaluates the related literature at home and abroad,research ideas and framework and design of this paper,explain the research method with the innovation;second chapter,introduces the theoretical basis of this paper,we first introduce the theoretical source of the traditional valuation methods,then introduces relevant theoretical basis of the real option method;the third chapter,this paper introduces the case,first introduces the background of both companies,followed by the merger cases in economic environment and motivation,and finally mergers and acquisitions process;the fourth chapter,the theoretical basis of the second chapter case analysis based on the valuation of the company,and further analyzes the differences and extended research The fifth chapter gets the conclusion and Inspiration of this paper,and finally puts forward the existing problems and limitations.This study found that:(1)high premium in company mergers and acquisitions can be explained from the perspective of real option;(2)the common use of the real option model and the traditional value analysis model can be used at the same time,to obtain more reliable measurement results;(3)the abandon option can also be used in monopoly high-tech company valuation;(4)the real option method is also applicable in the management decision.