Research On The Application Of Real Option Model In Unicorn Enterprise Valuation

With the in-depth integration and development of informatization and globalization,unicorns ushered in a golden period of development.The explosive growth of unicorn companies has greatly promoted regional economic development and industrial transformation and upgrading.After 2018,our country has paid more attention to unicorn companies and introduced a series of policies to encourage unicorn companies to go public,which has set off a boom in unicorn IPOs.However,the unicorn’s short establishment time,high R&D investment,high risk,and high return have made it difficult to assess the value of the company,and its stock prices have plunged.How to evaluate the value of unicorn enterprises reasonably and effectively has become an urgent problem to be solved.Based on reviewing the theory of real options and combing the relevant literature on the valuation of unicorn companies,this article first analyzes the development status of unicorn companies and focuses on listed unicorns in China,and analyzes the interests of unicorns before they go public.Various groups’ valuation motives and IPO performance,summarize the current status and difficulties of unicorn valuation;secondly,introduce the real option value evaluation method,compare the B-S model,the binary tree pricing model and the Schwartz-Moon model,and combine the characteristics and real option characteristics,select Schwartz-Moon pricing model for modeling;again select 14 unicorn companies listed on A shares and H shares in China from 2017 to 2020,involving a total of 6 Wind Tier 1 industries and 12 Tier 3 industries,4companies are in the life cycle,using panel data from 2015 to 2019,respectively,using Schwartz-Moon model and B-S model for valuation,and comparing and analyzing the two models from the aspects of value evaluation effect and sensitivity,proving Schwartz-Moon The superiority of the model in the valuation of unicorn companies;finally draws conclusions and raises questions for further study.Through research,this article draws the following conclusions:(1)The real option method effectively solves the problem of traditional valuation methods ignoring the potential value of enterprises,affirms the flexibility of corporate decision-making,and has outstanding advantages in the valuation of unicorn companies.(2)The Schwartz-Moon model has the advantages of comprehensive parameter coverage,no path dependence,and convenient calculation.It is more suitable for unicorn company valuation than the traditional B-S model.Regardless from the perspective of the industry or the stage of enterprise development,the Schwartz-Moon model’s valuation results for unicorn companies are less deviated from the actual value than the B-S model,and the valuation effects of different companies are more stable than the B-S model.(3)Sensitivity analysis found that the results of the Schwartz-Moon model are more sensitive to changes in four parameters such as the mean recovery speed.The accuracy of the model results depends on the values of each parameter to a certain extent.Therefore,when determining the parameters of the Schwartz-Moon model,The individuality of different companies should be fully considered when selecting value rules.