The Two-Factor Evaluating Model of Coal Resources Mining Rights Based on Vasicek Interest Rate

In China, evaluating coal resources mining right (for short MRCR) scientifically and effectively is a key and precondition of acquiring and transferring it. MRCR has the same option-like characteristics as stock call option, which is a multi-period call option exercised annually, thus evaluation methods of MRCR based on option can reflect the option-like characteristics of MRCR. Previous researches often assume that the risk-free interest rate is constant. In fact, the fluctuation of risk-free interest rates can directly affect the value of MRCR, empirical researches show that Vasicek interest rate can better fit the changing tendency of risk-free interest rate in China. A two-factor model evaluating MRCR based on Vasicek interest rate is set up. Through a practical instance, it´ s tested that the two-factor model, compared with DCF, can better reflect government´ s income as the owner of the resources. The value of this MRCR declines as the mean-reverting coefficient increases.