Stockpiling Cash When It takes Time to Build: Exploring Price Differentials in a Commodity Boom

Published: Oct 5, 2016
Abstract
Some projects take time to build or are slow to yield cash flows. This may impact the dynamics of investment and liquidity management, although few studies test their financial implications. We exploit peculiar advantages of copper mines as a laboratory to identify cash-flow sensitivities. In this context, investment decisions depend on the expectations of the long run price of the commodity, while the spread between the spot price and this long...
Paper Details
Title
Stockpiling Cash When It takes Time to Build: Exploring Price Differentials in a Commodity Boom
Published Date
Oct 5, 2016
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