Pricing Mining Concessions Based on Combined Multinomial Pricing Model

Table 7

The comparison of results by using binomial tree model with constant annualized volatility and the model from this paper.

Annualized volatility	The price of the concession (million yuan)	Calculation model
15%	13.83	TBPM
20%	16.85	TBPM
25%	20.20	TBPM
30%	23.83	TBPM
Multi	20.48	CMPM

Note. Here, “Multi” refers to using multiple annualized volatilities to calculate the price of the concession. TBPM refers to traditional binomial pricing model. CMPM refers to combined multinomial pricing model.