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The Real Options Component and Market Value of Taiwan Technological Companies

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  • Kuo-Jung Lee

Abstract

Real options valuation has been applied in real investment extensively. However the empirical researches of real options components’ value are seldom studied. This study uses the panel data model to test whether the stock prices of Taiwan listed companies reflect investor’s expectations regarding the value of real options. This article demonstrates that investors cannot ignore the real options components when evaluating stock market value. The results also confirm that the proportion of a firm’s market value not due to assets-in-place is significantly and positively related to the variables of stock beta, skewness of stock returns, size, capital stock, and research and development. In addition, firms with lower firm life cycle have a higher real options value.

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  • Kuo-Jung Lee, 2017. "The Real Options Component and Market Value of Taiwan Technological Companies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(1), pages 98-108, January.
    • Handle: RePEc:mes:emfitr:v:53:y:2017:i:1:p:98-108
    DOI: 10.1080/1540496X.2016.1149060
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    Cited by:

    1. Kuo-Jung Lee, 2019. "The effects of social responsibility on company value: a real options perspective of Taiwan companies," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 3835-3852, January.
    2. Kuo-Jung Lee, 2018. "Valuations and Decisions of Investing in Corporate Social Responsibility: A Real Options Viewpoint," Sustainability, MDPI, vol. 10(10), pages 1-14, October.

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