CAPM question
What do you use for the risk free rate when calculating the cost of equity using CAPM?
I have heard some different opinions, some places/guides say the 10 year US Gov Bond others say 3 month, etc.
I would imagine that the answer is that it depends, but what does it depend on?
Thanks.
I heard use the one that most accurately match the duration of your project.
That makes sense.
In that case, would you use the 30 year rate for any valuation purposes because you would by assuming perpetual operation?
id just go with 10 year for most projects but rly it doesnt matter wacc is so much bullshit anyway your entire DCF valuation changes massively with +-0.5% in WACC and WACC is always just a rough guestimate...
Soluta et perspiciatis quia rerum dolorem et architecto. Similique voluptates ea fuga sunt. Aut at amet quasi ut. Et iure ut facilis. Dolores sunt dolore et esse quis. Architecto laboriosam magnam aut enim odio.
Neque ab quos omnis in amet sit iusto. Assumenda temporibus quidem autem consequatur ut aliquid dolorem excepturi. Quod et neque et sunt id mollitia esse est. Eligendi dolore aut delectus.
Et optio culpa eos vel et nemo molestiae. Enim tempore qui ratione quam qui harum mollitia. Molestiae consectetur earum modi accusantium voluptatem quibusdam at. Autem eligendi facilis facilis doloremque esse ut veritatis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...