Question: In the current interest rate environment using a required return estimate based on the short-term government bond rate and a historical equity risk premium defined
In the current interest rate environment using a required return estimate based on the short-term government bond rate and a historical equity risk premium defined in terms of a short-term government bond rate would be expected to
a) bias long-term required return on equity estimates upwards
b) biaslong-term required return on equity estimates downwards
c) have no effect on long-term required return on equity estimates
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