Monte Carlo method for High-tech Enterprise IPO Market Timing: Empirical Study Based on American Real Option Approach

Liu Yang, Hu Zhiqiang

Abstract


This article apply the Monte Carlo method for estimation of the value of patent and research the high-tech enterprises possess, in accordance with the thought of American real option pricing model, which in turn determine the value of the option-company's decision of IPO. Empirical results show that China's high-tech enterprises generally select the optimal IPO timing from a forward-looking, based on a comprehensive analysis of the industry in features and market environment and mastering market competitive advantage of the patent, and effectively contribute to the future development of the enterprise through the use of public funds.


Keywords


IPO; American real option; High-tech enterprises; LSM Monte Carlo method.

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