{"id":{"repo_id":"texas","oai_identifier":"oai:repositories.lib.utexas.edu:2152/117582"},"canonical_url":"https://search.dev.ndltd.org/etd/texas/oai:repositories.lib.utexas.edu:2152/117582","repository":{"repo_id":"texas","name":"University of Texas","base_url":"https://repositories.lib.utexas.edu/server/oai/request"},"display":{"title":"Price hedging and its value to gold producing companies","abstract":"Gold price volatility has created a market for securities based on gold price. This liquid market has afforded gold company managers an opportunity to hedge, or reduce, the risk arising from gold price movements. Typical price hedging instruments include forward sales contracts, futures contracts, options, and gold loans. The question addressed in this thesis is whether price hedging adds value to companies using it. Several areas are identified where hedging might have some effect on company value. They include cost of capital, operating costs, and investment decision making. Of these, the cost of capital appears to be most important. Hedging may result in cheaper debt, but some evidence indicates that the investor's required rate of return as calculated by the CAPM and beta is increased by hedging. If the CAPM holds, the company's market value could be reduced. The result is that companies evaluating an existing hedging policy or those considering implementing a policy have to determine individually whether hedging pays off. Recognizing the possible detriment to company value and knowing the potential sources of added value allows the investigator to make informed decisions concerning the costs and benefits of a hedging policy","abstract_html":"Gold price volatility has created a market for securities based on gold price. This liquid market has afforded gold company managers an opportunity to hedge, or reduce, the risk arising from gold price movements. Typical price hedging instruments include forward sales contracts, futures contracts, options, and gold loans. The question addressed in this thesis is whether price hedging adds value to companies using it. Several areas are identified where hedging might have some effect on company value. They include cost of capital, operating costs, and investment decision making. Of these, the cost of capital appears to be most important. Hedging may result in cheaper debt, but some evidence indicates that the investor's required rate of return as calculated by the CAPM and beta is increased by hedging. If the CAPM holds, the company's market value could be reduced. The result is that companies evaluating an existing hedging policy or those considering implementing a policy have to determine individually whether hedging pays off. Recognizing the possible detriment to company value and knowing the potential sources of added value allows the investigator to make informed decisions concerning the costs and benefits of a hedging policy","abstract_has_math":false,"creators":["Franks, Richard Lee, 1963-"],"institution":"University of Texas at Austin","degree_name":"Master of Arts","degree_level":"Masters","degree_discipline":"Energy and Mineral Resources","degree_department":null,"school":null,"contributors":[],"advisors":["Parrino, Robert, 1957-","Van Rensburg, W. C. J."],"committee_chairs":[],"committee_members":[],"year":1994,"date_issued":"1994","date_published":"1994","updated_at":"2026-07-24T05:00:58Z","subjects":["Gold industry","Price hedging","Gold prices","Securities","Gold price volatility","Gold producing companies"],"languages":["eng"],"rights":["Copyright © is held by the author. Presentation of this material on the Libraries' web site by University Libraries, The University of Texas at Austin was made possible under a limited license grant from the author who has retained all copyrights in the works."],"rights_urls":[],"identifier_entries":[{"key":"dc:identifier.uri","label":"Identifier URI","values":["http://dx.doi.org/10.26153/tsw/44462"],"render_values":[{"text":"http://dx.doi.org/10.26153/tsw/44462","href":"http://dx.doi.org/10.26153/tsw/44462","code":true}]}]},"links":{"outbound_url":"https://hdl.handle.net/2152/117582","outbound_label":"Handle","outbound_source":"dc:identifier.uri"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.advisor","label":"Advisor","values":["Parrino, Robert, 1957-","Van Rensburg, W. C. 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Several areas are identified where hedging might have some effect on company value. They include cost of capital, operating costs, and investment decision making. Of these, the cost of capital appears to be most important. Hedging may result in cheaper debt, but some evidence indicates that the investor's required rate of return as calculated by the CAPM and beta is increased by hedging. If the CAPM holds, the company's market value could be reduced. The result is that companies evaluating an existing hedging policy or those considering implementing a policy have to determine individually whether hedging pays off. Recognizing the possible detriment to company value and knowing the potential sources of added value allows the investigator to make informed decisions concerning the costs and benefits of a hedging policy"]},{"key":"dc:format.medium","label":"Dc Format Medium","values":["electronic"]},{"key":"dc:title","label":"Title","values":["Price hedging and its value to gold producing companies"]}]}],"canonical_facts":{"dc:contributor.advisor":["Parrino, Robert, 1957-","Van Rensburg, W. C. J."],"dc:creator":["Franks, Richard Lee, 1963-"],"dc:date.accessioned":["2023-03-06T22:50:50Z"],"dc:date.available":["2023-03-06T22:50:50Z"],"dc:date.issued":["1994"],"dc:description.abstract":["Gold price volatility has created a market for securities based on gold price. This liquid market has afforded gold company managers an opportunity to hedge, or reduce, the risk arising from gold price movements. Typical price hedging instruments include forward sales contracts, futures contracts, options, and gold loans. The question addressed in this thesis is whether price hedging adds value to companies using it. Several areas are identified where hedging might have some effect on company value. They include cost of capital, operating costs, and investment decision making. Of these, the cost of capital appears to be most important. Hedging may result in cheaper debt, but some evidence indicates that the investor's required rate of return as calculated by the CAPM and beta is increased by hedging. If the CAPM holds, the company's market value could be reduced. The result is that companies evaluating an existing hedging policy or those considering implementing a policy have to determine individually whether hedging pays off. Recognizing the possible detriment to company value and knowing the potential sources of added value allows the investigator to make informed decisions concerning the costs and benefits of a hedging policy"],"dc:format.medium":["electronic"],"dc:identifier.uri":["https://hdl.handle.net/2152/117582","http://dx.doi.org/10.26153/tsw/44462"],"dc:language.iso":["eng"],"dc:rights":["Copyright © is held by the author. Presentation of this material on the Libraries' web site by University Libraries, The University of Texas at Austin was made possible under a limited license grant from the author who has retained all copyrights in the works."],"dc:subject":["Gold industry","Price hedging","Gold prices","Securities","Gold price volatility","Gold producing companies"],"dc:title":["Price hedging and its value to gold producing companies"],"dc:type":["Thesis"],"thesis:degree_discipline":["Energy and Mineral Resources"],"thesis:degree_level":["Masters"],"thesis:degree_name":["Master of Arts"],"thesis:institution_name":["University of Texas at Austin"]},"updated_at":"2026-07-24T05:00:58Z"}