Page 1 of 13

Real Options Literature

Continues for 12 more pages »
Read full document

Real Options Literature

Page 1 of 13
iBusiness, 2011, 3, 43-48
doi:10.4236/ib.2011.31007 Published Online March 2011 (http://www.SciRP.org/journal/ib)

Real Options Literature Review*
Shihong Zeng, Shuai Zhang
Finance Department of Economics Management School, Beijing University of Technology, Beijing, China Email: zengshihong2000@yahoo.com.cn Received October 19th, 2010; revised November 19th, accepted 26th, 2010.

ABSTRACT
After 30 years of discussion and research, the academic community has established a complete theoretical system of real options and provided an excellent framework for the use of real options theory in the investment appraisal of high-tech projects. An option is an entitlement without any obligation and it has been used to describe a variety of management decisions in business investment. The description of management is effective and proper. Due to the introduction of real options theory, there has been a major breakthrough in the investment area. Project evaluation is the core content of bank credit risk assessment and business evaluation. The core content never changes from the investment evaluation framework to the credit risk evaluation framework. The project evaluation meets various needs of subject s in different ways. In this paper, the importance of real options is analyzed and the literature is reviewed. Keywords: Real Options, Literature Review, Enterprises

1. Introduction
A knowledge economy speeds the development of science and technology enterprises. There were 55 National Level High-Tech Industrial Development Districtsestablished by 2008, with a total output value break zone GDP of 1.5 trillion Yuan RMB (REN MING BI) in these districts. In China, this accounted for 5%. This is greater than 11 percentage points over the same period of the GDP. These districts created 80% of the scientific and technological achievements of the country. Zhongguancun Science and Technology Park Zone in China, for example, are the most active areas of innovation and...