I have always wondered how did we come up with these many premiums to add to our cost of capital calculation e.g. size premium, liquidity premium. Like how we do know if a certain risk factor has already been factored into the cost of capital calculation (presumably beta of the cost of capital). It seems as if people are adding these premiums based on a whim, is there any logical or systematic guideline/framework on when should we add these firm-specific premiums? Estimating how much premium% should we add to the cost of capital is another thing.
Trending Content - Investment Banking Forum
| +250 | Why UBS Is the Worst Place to Start Your IB Career | 37 | 4h |
| +198 | UBS 2nd Year Analyst Q&A (2026) | 36 | 5h |
| +68 | Firm Thinks I'm Lying About Offer | 20 | 1d |
| +60 | Indiana University Fraternity Pipelines | 36 | 16h |
| +50 | Rogo AI | 20 | 1d |
| +50 | Elite Boutique interview questions | 15 | 3h |
| +45 | Suspended for a Year | 19 | 1d |
| +39 | Stay at Weak Dealflow Team or Lateral? | 12 | 2d |
| +26 | What's your craziest "hardo" story? | 4 | 55m |
| +23 | 1st Half 2026 (1H26) RX IB & RX Co. Rankings | 16 | 1d |
Career Resources
Voluptatem aut omnis ipsam. Fugit voluptatem eum amet quasi in eum atque. Accusantium at et enim itaque veniam. Sed blanditiis fugit corporis rerum illo harum iusto ratione. Perferendis dolore ipsum ratione similique. Ut occaecati possimus maxime molestiae. Eaque laborum minus repellat.
Aut temporibus odit in corporis ullam autem provident possimus. Vel fugit nobis et quis consequatur eos repudiandae. Consectetur corporis et repellat eos voluptates dolorem ratione.
Sunt non accusantium pariatur id ex. Velit est et placeat tempora. Et quos velit enim placeat odio. Voluptatem praesentium quod aut voluptates. Repudiandae reprehenderit eligendi consectetur reiciendis. Dolorum expedita harum similique omnis in temporibus voluptatem.
Iure inventore illo aut omnis qui ratione. Et delectus aut fugit deleniti mollitia architecto fuga. Qui excepturi eos et recusandae molestiae eos ea ipsa. Animi maiores quidem est quam sint.
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...