Economics at your fingertips  

Analysis of ore transportation: A financial approach using the Black & Scholes method in real options

Rodrigo R. de Freitas, Diego M.E. Gonçalves, Thiago de S.C.P. Mayrink and Márcio de A. D’agosto

Journal of Finance and Investment Analysis, 2018, vol. 7, issue 4, 4

Abstract: The cost of transportation has a great weight in the decision-making of business agents. The correct choice may provide greater returns in the medium and long term. In the research we tried to approach the Black & Scholes model with twin security procedure (comparison of two models with similar methods). This method absorbs the market oscillations in ex-nunc. Three companies were used: MRS - Logistics S.A. and National Steel Company - CSN for railroad, in relation to the pipeline the company was Anglo Ferrous Brazil subsidiary of Anglo American. The real options model was applied to distinguish the investment in ore pipeline or railroad for the ore transportation in the Brazilian scenario, which was very inflated by the central bank interest rate and on any hypothesis, rail transportation was the best in the period analyzed (2008 to 2016). JEL classification numbers: R42; M21; L92; L95Keywords: Real options, Investment analysis, Ore transportation, Railroad, ore Pipeline.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Journal of Finance and Investment Analysis from SCIENPRESS Ltd
Bibliographic data for series maintained by Eleftherios Spyromitros-Xioufis ().

Page updated 2018-09-29
Handle: RePEc:spt:fininv:v:7:y:2018:i:4:f:7_4_4