Valuation of the China internet company under a real option approach

The objective of the paper is description, application and verification of the real option methodology in financial decision-making of the internet company in China. There is the real option methodology described. Subsequently financial characterisation of internet Baidu company is given. Crucial part consists in calculation of the company value under several scenarios and real option alternatives. We conclude that generalised real option methodology is suitable method of valuation of the internet company under China economical conditions.