Research On The Valuation Of Zeus Entertainment M&A Oasis Game Based On Binary Tree Option Pricing Model

Merger and reorganization of enterprises has always been one of the most topical areas in the capital market.Since the reform and opening up,with the in-depth development of China’s capital market,mergers and reorganizations of Chinese enterprises have become more active.However,merger and reorganization may not always produce the effect of the cooperative development of the two sides of the transaction enterprises.In many cases,merger and reorganization is not conducive to the sustainable and healthy development of the merger enterprises.If the valuation of the acquired enterprise is too high during merger and acquisition,more goodwill will be formed.If the actual operation and development of the acquired enterprise cannot meet the expectation during merger and acquisition,the impairment of goodwill is inevitable.Therefore,reasonable evaluation of the value of the target enterprise is the top priority in the process of merger and reorganization.This paper studies the valuation of mergers and acquisitions of online game enterprises.Combined with the characteristics of online game industry in China and the particularity of m&a valuation,this paper analyzes the applicability of the binary tree option pricing model to the m&a valuation of enterprises in online game industry,and compares it with the traditional valuation method to find a basis for the case study in the following paper.By comparing the traditional value evaluation method with the binary tree option pricing model,it is found that the traditional three enterprise value evaluation methods have their own advantages and disadvantages,and the practical scenarios are different.Compared with the three traditional value evaluation methods,the binary tree option pricing model has more obvious advantages.Combining with the specific case of Zeus Entertainment acquisition of Oasis Game,this paper finds that compared with the enterprise value calculated by the asset appraisal agency using the income method,the enterprise value obtained by using the binary tree option pricing model is lower than the enterprise value obtained by using the income method.The main reason is that the binary tree option pricing model takes into account that in the actual business process of the enterprise,the enterprise’s business strategy is not always the same,and will be affected by various factors and there are various uncertainties.Specifically,the income method considers that the enterprise’s operating income is increasing during the forecast period of enterprise value evaluation,but the binary tree option pricing model assumes that the enterprise’s operating income will increase and decrease in two different situations according to the market situation.In addition,the binary tree option pricing model in this paper also takes into account the situation when the value of the enterprise’s going concern is less than the liquidation value of the enterprise.Combination of Zeus Entertainment m&a performance,this paper found that the gods entertainment performance is not ideal,the main reason is the amount of goodwill Oasis Game amount is larger,the gods entertainment that goodwill impairment exists is proved that the enterprise exists uncertainty,in the process of enterprise operating income in the forecast period is growing this assumption is too optimistic,lead to enterprise valuation,so this paper argues that the use of binary tree option pricing model to evaluate the value of Oasis Game value should be more reasonable.At the end of the paper by using a binary tree option pricing model is applied to research of network game enterprise mergers and acquisitions valuation in our country the main research conclusions: because of the traditional valuation method for the applicability of the network game enterprise mergers and acquisitions valuation in our country is not strong,and the binary tree option pricing model can reflect the acquired enterprise complete real value in operation,so the application of binary tree option pricing model in the network game enterprise mergers and acquisitions valuation is more rationality,are a good complement to the traditional valuation methods,and also for improving the quality of China’s online game industry mergers and acquisitions have positive effects.