What is the accurate market risk premium to use currently? (for the CAPM formula for example)
10 year treasury is at 2.25%. What is the market premium that you are using?
10 year treasury is at 2.25%. What is the market premium that you are using?
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In my MSF program most professors are suggesting ~4.5-5.7% depending on the argument you're making.
"7%, always use 7%." - big 4 partner
A bit of background on this: that bastard would always drink coffee out of one particular cup. on my last week there, I did the following:
In my corporate finance class in b-school we were told to use the 30-year bond rate minus 1%, since the long bond is a bit more risky than shorter-term bonds. But yeah, 10% is fine for the risk-free rate. However, do NOT use treasury bill rates or anything below 5-year durations since any standard DCF valuation will have a projection period of at least 5 years.
10% risk-free rate? which market is that in? 5y or 10y government bond yld (US, GER) should be fine. agree with the argument that duration should be >= 5y
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