Investment decision-making of the mining right values based on mean-reverting

Author

Liu, Jianbing ; Liu, Liang ; Long, Mi

Author_Institution

Coll. of Econ. & Manage., Jiangxi Univ. of Sci. & Technol., Ganzou, China

fYear

2009

fDate

8-11 Aug. 2009

Firstpage

235

Lastpage

239

Abstract

It is the key to reasonable estimate the mining right value in the investment decision-making. Mean-reverting is used to simulate the fluctuant process of product price, normal distribution and stochastic process help to forecast the annual net income. Then, the cost of equity can be reckoned by CAPM (the capital asset pricing model), and considering the cost of credit subscribed capital, the dynamic risk cost of mineral projects also can be estimated by weighted average cost of capital model. At last, we can get the investment value appraisal model of mineral projects. The results accords with the practically fluctuant character of mining right value and investment risks, the value of mineral projects also accord with the practical operating situation, it can provide a scientific and important reference for the decision-maker of mining projects.

Keywords

decision making; decision theory; forecasting theory; investment; minerals; mining industry; normal distribution; pricing; project management; stochastic processes; annual net income forecast; capital asset pricing model; capital model weighted average cost; investment decision-making; mean-reverting; mineral project; mining project; mining right value; normal distribution; product price fluctuant process; stochastic process; Appraisal; Costs; Decision making; Educational institutions; Gaussian distribution; Investments; Mineral resources; Predictive models; Pricing; Stochastic processes; Capital Asset Pricing Model; investment decision-making; mean-reverting; mining right value; weighted average cost of capital;

fLanguage

English

Publisher

ieee

Conference_Titel

Computer Science and Information Technology, 2009. ICCSIT 2009. 2nd IEEE International Conference on

Conference_Location

Beijing

Print_ISBN

978-1-4244-4519-6

Electronic_ISBN

978-1-4244-4520-2

Type

conf

DOI

10.1109/ICCSIT.2009.5234427

Filename

5234427