Enterprise Value Based On Real Option Risk Assessment Study

The evaluation of venture business is the key of venture capital. Butthe different value character of venture business with conventionalenterprise makes that the application of conventional enterprise appraisalmethod is limited. So the evaluation of venture business becomes aproblem to be solved that restricts the development of venture capital.The goal of this paper is to solve the problem.Aiming at the different value character of venture business withconventional enterprise, and the author analyzed the value formcharacteristic of venture business with enterprise capability value theory,then the conventional enterprise appraisal method and the real optionappraisal method were combined to value the worth of venture business.The article first recognized real options in venture business and analyzedthe relevance of them, and arrival at a conclusion that for the value ofreal option in venture business, we just need to calculate the value ofexit option and multi-stage growth option, and the value of the twooptions can add direct. Then the article introduced decompositionmethod to solve the non-tradable character of its underlying asset forreal option pricing, created pricing models of exit option and multi-stagegrowth option and adopted computer simulation method to solve the realoption-pricing model. At last, the paper showed the application process of the method put forward above through a case, and gained the worth ofreal option with different parameter by computer simulation, and solvedthe problem that the parameter of venture business is hard to ascertain.The paper also compared the value of venture business gained by thepaper with NPV method, and analyzed similarities and differences andrelative merits of the two methods, thereby proved the superiority of themethod put forward by the paper, providing a way for the evaluation ofventure business.