Strategic Investments as a Real Options Game：An Application to Cellphone EMS Industry

• Main Authors: Yu, Ching-Tsung, 游景璁
• Other Authors: Huang, Hsing-Hua
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/98150277008471722824

碩士 === 國立交通大學 === 財務金融研究所 === 97 === In cellphone EMS industry, capacity supply is an important concern for producer. In order to earn additional profit, managers may choose capacity expansion strategies, such as strategic M&A, to compete with their rivals. This study uses the options-game framework to value an M&A project between Foxconn and its competitor BYD, and analyzes the investment strategies in each stage. We take account of the effect of BYD’s responses and distinguish the flexibility and strategic value. In addition, we examine how sensitive a particular NPV is to changes in underlying assumptions.