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Contribution Details
| Type | Bachelor's Thesis |
| Scope | Discipline-based scholarship |
| Title | How sensitive is the business model of coal producing companies to changes in cost of capital? |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Date | 2020 |
| Abstract Text | Coal combustion and therefore the coal industry is one of the main reasons for the change in earth’s climate in the past century. The effect of the coal industry on our ecologic environment has been subject of various studies, generating suggestions for improvements in the industry and stressing the importance of renewable energy sources. Whilst extend literature focuses on the influence of investments and divestments on the coal output, this thesis aims to provide insight into the influence of cost of capital on the coal output of companies in the United States. Its ultimate goal is to examine the relationship between cost of capital and coal output in short tons. The models are built upon data of listed coal producers in the United States. The results suggest a weak positive correlation between cost of capital in form of a Weighted Average Cost of Capital (WACC) and coal output in short tons and a strong positive correlation between the ten-year treasury rate and coal output in short tons. |
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