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The Impact of Commodity Price Risk on Company Value - Empirical Analysis of Company Value Exposure to Commodity Prices Salam, Aam Abdul; Novita, Neng Rahayu
Jurnal Studi Manajemen dan Bisnis Vol 11, No 2 (2024): Desember
Publisher : Trunojoyo University of Madura

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21107/jsmb.v11i2.28490

Abstract

Commodity prices tend to fluctuate more than exchange rates and interest rates, making commodity price risk a potentially larger source of risk for companies. This paper offers a detailed examination of the economic exposure to commodity prices for a broad group of nonfinancial firms. The findings reveal that some corporations have net exposure to specific commodity prices. However, despite the high volatility of commodity prices, the risk associated with them is not found to be more significant than other financial risks. The results suggest that commodity price changes have minimal impact on cash flow and that companies engage in hedging to manage this risk.