Stock Valuation of Internet Company based on Residual Income Option Model

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Other Title
  • 残余利益オプションモデルによるインターネット企業の株式評価

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Stocks are securities embedding two contingent clams consisted of residual assets and dividend distribution. These claims yield a future pay-off replicated as real option for stockholders. Accountability in corporate accounting represents the responsibility of reporting the useful information to evaluate these two clams. It follows that firms’ managers ultimately execute their accountabilities by reporting the real option value included in stocks. This paper indicates that some stock valuation models are derived by double account system supporting this execution of accountability. On that basis, we demonstrate the characteristics of these valuation models by illustrating internet business company faced a heightened risk. Superiority of residual income option model is inferred by Monte-Carlo simulation and sensitivity analysis.

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