Browsing by Author "Lin, Tyrone T."

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AN OPTIMAL MARKET ENTRY/EXIT EVALUATION MODEL WITH PARTIAL FINANCING FUNDS
(2010-04-01)
Lin, Tyrone T.
;
Ko, Chuan-Chuan
;
Liu, Chien-Yu
;
經營管理研究所
;
Institute of Business and Management
The paper mainly aims to introduce the real options approach to construct an evaluation model for the firm value under partial financing funds. The paper examines that production volume follows the geometric Brownian motion and considers that both the market entry of investment cost and the market exit of withdrawal cost match the linear function with production volume. Then the paper evaluates the potential firm value before market entry, the operational value with the firm's operating, and the market exit value with the firm's stopping to operate so as to assess the whole firm value, shareholder value, and bondholder value hereafter. The results show that different debt ratios will affect the firm's investment decision. The paper figures out the optimal decision-making based on the maximum profit of shareholders or the maximum profit of shareholders-and-bondholders. The factor is finance leverage; although interest expenses are tax deductible, an overly high leverage may trigger agency costs for a firm, which will offset the tax shields associated with leverage. Therefore, a firm should not leverage too much. Furthermore, the paper constructs an innovative evaluation model in a dynamic financing environment in order to provide the management team with a decision-making mechanism for their decisions in market entry or market exit in a timely manner in the face of uncontrollable exogenous variables.
Applying jump-diffusion processes to liquidate and convert venture capital
(2010-08-01)
Lin, Tyrone T.
;
Ko, Chuan-Chuan
;
Chang, Chia-Wen
;
經營管理研究所
;
Institute of Business and Management
This study attempts to apply real options and expand the model designed by Lin and Huang [Lin, T.T., Huang, Y.T.: J. Technol. Manage. 8(3), 59-78 (2003)], which helps venture capital (VC) companies to optimize project exit decisions. The expected discounted factor and a jump-diffusion process combine to assess the value of a start-up company, and determine the threshold of the exit timing of liquidation or convertibility for establishing the optimal disinvestment evaluation model for VC companies. When the project value is below V(L)*, the VC company carries out liquidation, but when the project value exceeds V(C)*, the VC company performs convertibility. The project value is ranging between (V(L)*, V(C)*), and the best choice is holding the decision and waiting to carry out the rights of liquidation and convertibility next time. Besides, this work attempts to identify the expected discounted time in terms of the investment time for VC companies.
Applying jump-diffusion processes to liquidate and convert venture capital
(2010-08-01)
Lin, Tyrone T.
;
Ko, Chuan-Chuan
;
Chang, Chia-Wen
;
經營管理研究所
;
Institute of Business and Management
This study attempts to apply real options and expand the model designed by Lin and Huang [Lin, T.T., Huang, Y.T.: J. Technol. Manage. 8(3), 59-78 (2003)], which helps venture capital (VC) companies to optimize project exit decisions. The expected discounted factor and a jump-diffusion process combine to assess the value of a start-up company, and determine the threshold of the exit timing of liquidation or convertibility for establishing the optimal disinvestment evaluation model for VC companies. When the project value is below V(L)*, the VC company carries out liquidation, but when the project value exceeds V(C)*, the VC company performs convertibility. The project value is ranging between (V(L)*, V(C)*), and the best choice is holding the decision and waiting to carry out the rights of liquidation and convertibility next time. Besides, this work attempts to identify the expected discounted time in terms of the investment time for VC companies.
The venture capital entry model on game options with jump-diffusion process
(2011-11-01)
Ko, Chuan-Chuan
;
Lin, Tyrone T.
;
Yang, Chyan
;
經營管理研究所
;
Institute of Business and Management
This paper aims to apply game options to construct the optimal decision-making and management tool for venture capital (VC) firms. This model emphasizes the inferences with game options on the market structures formed by different competition and investment strategies of the two VC firms to reflect the investment returns. These market structures are classified into an entry-deterred game (specific monopoly), a leader's dominated strategies (duopoly), and simultaneous investment. It is considered how to select investment timing to avoid any potential competitive threats in order to provide the optimal expected threshold values for the investment decisions of VC firms. (C) 2011 Elsevier B.V. All rights reserved.