In regards to a debate I’m having with friends, what’s the case for including liquidity premium into discounting factor for a bank?
By liquidity premium here, I’m referring to the cost of funding for a bank that is obtained from market/central bank. I.e. the LIBOR component in any lending product.
Isn’t it considered to be a form of cost of capital here and therefore to be imbedded into the discounting rate when valuing a banking/lending operation?
Nesciunt delectus incidunt eos. Asperiores deserunt autem voluptates quidem id rem est. Aperiam dolores sit ut aut molestiae aut dolorem error. Quis ea explicabo ut fugit ab dicta. Voluptates ut nulla inventore quis. Impedit eos repellat illum culpa repudiandae.
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...