Pricing High-Tech Company by Real Options Approach: A Case Study of HTC
tsai, shunhui (2007) Pricing High-Tech Company by Real Options Approach: A Case Study of HTC. [Dissertation (University of Nottingham only)] (Unpublished)
Traditionally, Discounting Cash Flows (DCF) approaches are used to project valuation and then extend to company valuation. With the uprising development of options theory and computational techniques, an alternative valuation approach - real options approach is proposed to emphasize what traditional valuation approaches neglect. Since high-tech companies have option-like characteristics and asymmetric payoffs, this paper attempts to apply real options pricing model developed by Schwartz and Moon (2000, 2001) to price high-tech companies and look for the key value drivers. The paper adopts case study methodology, focusing on a leading company --High Tech Computer (HTC), which is develops and produces Smart phones and Pocket PCs. After simulations, it seems this model can produce a reasonable result for valuation purpose.
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