Application of the option price model in mining industry mergers and acquisitions

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dc.creator Xiao, Chris
dc.creator Zhang, Michael Xiaoou, 1973-
dc.date.accessioned 2014-02-14T20:29:25Z
dc.date.available 2014-02-14T20:29:25Z
dc.date.issued 2012
dc.identifier http://library2.smu.ca/bitstream/handle/01/25402/asb_proceedings_2012.pdf#page=298
dc.identifier.uri http://library2.smu.ca/xmlui/handle/01/25686
dc.description.abstract The traditional corporate finance theory of discounted cash flow valuation (DCF) has many limitations. In order to complement the drawbacks, real option valuations (ROV) have been widely accepted and applied in many industries to evaluate projects or firms because of its ability to analyze flexibilities and uncertainties. In this paper, we focus on the mining industry, and identify its valuation challenges. We review the current developments of DCF and ROV model and apply both methods into a real firm (Barrick Gold) to analyze the value of the firm under Mergers and Acquisitions (M&A). Through the comparison, we discuss the benefits of ROV in mining industry and the premium of the acquirer’s offer price. We also identify areas for further research. en_CA
dc.language.iso en en_CA
dc.publisher Atlantic Schools of Business en_CA
dc.subject.lcsh Mineral industries -- Finance
dc.subject.lcsh Corporations -- Valuation
dc.subject.lcsh Consolidation and merger of corporations
dc.subject.lcsh Mineral industries -- Mergers
dc.title Application of the option price model in mining industry mergers and acquisitions en_CA
dc.type Text en_CA
dcterms.bibliographicCitation Proceedings of the 42nd Atlantic Schools of Business conference, Dalhousie University, 2012, pp 295-307


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