The Progress on Real Options for Company Valuation

DOI

10.2991/assehr.k.211209.440How to use a DOI?

Keywords

Real option method; BS model; Asset pricing

Abstract

Nowadays, real options derived from financial options are increasingly used in asset pricing. However, with different business models varied by companies, the existing real option pricing models are unable to be generally adopted. This paper addresses the problem of asset pricing under the impact of potential factors and discusses the path to carry out fair asset pricing with various business models. For the purpose of exploring the pricing method of using real options for asset pricing in practice, the article researches and sorts out the existing literature based on information retrieval. The applicability of real options, real options pricing models, parameter estimations, and the difficulties and problems during the application are systematically analyzed. Subsequently, the future research outlook and guideline are proposed.

These results shed light for a more accurate and practical company valuation provided by real option pricing methodology compared with the DCF method

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Yixuan Chen
PY  - 2021
DA  - 2021/12/15
TI  - The Progress on Real Options for Company Valuation
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 2704
EP  - 2711
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.440
DO  - 10.2991/assehr.k.211209.440
ID  - Chen2021
ER  -