Evaluation of Business Value Based on Managerial Options

Abstract

The business value maximization should be used as the superior target of financial management. Enterprise in developing process is faced with many valuable opportunities for investment. However, the traditional methods merely put the emphasis on enterprise cash equivalent value and present worth of income. In order to effectively overcome shortcomings of traditional evaluation method and make the enterprise value evaluation more scientific and practical, this paper applies managerial option method to evaluate project, which consider operational flexibility, the diversity of investment programs and market uncertainties based on enterprise predictable cash flow. The purpose of this study is providing new ideas for enterprise evaluation by taking advantage of managerial options for business valuation