China’s Internet Enterprise Based On Real Option Theory Value Assessment Study

In recent years,China’s capital market has greatly increased its support for the Internet industry,and China’s Internet industry has achieved leap-forward development.In this context,investors’ investment needs are growing,and Chinese Internet companies continue to make technological innovations in order to meet the needs of investors.At the same time,Internet companies’ listing capital financing,mergers and acquisitions and other capital operation activities are more and more frequent.The high price-earnings ratio or even the negative price-earnings ratio of Internet companies in the capital market has become an unexplained theoretical problem in corporate valuation.The intrinsic value of Internet companies is also the enterprise value.Difficulties in the assessment.Due to the high degree of uncertainty and high risk characteristics of the future development of Internet companies,traditional valuation methods cannot reflect the value of Internet companies scientifically,accurately,and effectively,while the real option method is very suitable for the valuation of such enterprises..This paper selects the Internet enterprise LeTV as an example,and uses traditional valuation methods and real option methods to evaluate it.The valuation results show that the real option method is more suitable for LeTV’s valuation.After sensitivity analysis,it is found that the initial income growth rate,variable cost rate and average recovery rate are important factors affecting the value assessment of Internet companies.The statistical analysis of pricing error after calibration of multiple Internet enterprise models shows that: Overall,the SM model is suitable for Internet enterprise valuation,and it is more suitable for valuation time.The time interval between establishment and establishment of enterprises is shorter,and the fluctuation rate of initial income growth rate is high.And Internet companies with high capital expenditure rates.Finally,on the basis of the empirical results,the Internet sector investors and Internet business operators are advised separately.