A research of valuation based on EVA and fuzzy option

Abstract

Both EVA and the real option models have their own advantages. If we only use one of these two models, usually we can not consider exactly the value based on the cost of equity, or underestimate the potential value which the investment brings to the enterprise. This paper attempts to construct an evaluation method that unifies EVA and the fuzzy real options to the enterprise value evaluation, regarding the enterprise value as a sum of two parts: the value of profit ability based on the existing foundation and the value of potential profit opportunity. In the end, we verify the rationality of the method through a computation example.