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.
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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...
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