Real options, firm valuation, and corporate information environment

This paper uses the real options model to evaluate the firm value of Chinese A-share listed firms. We find that the value based on the real options model is closed to the intrinsic value of the enterprise, and can explain the variance of stock returns. We further analyze the influence of the corporate information environment on the correlation of real option value, and find that less agency conflict is beneficial to investors' access to relevant information, thereby enhancing the correlation between real-options-based firm value and stock returns. This study has practical significance for understanding the valuation of listed companies and stabilizing the development of capital markets in China.