You've noticed that analysts at your company use a Market Equity Risk Premium of 5.5% when valuing

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You've noticed that analysts at your company use a Market Equity Risk Premium of 5.5% when valuing firms for investment. You believe that 4.72% is more appropriate.Explain the impact of using 5.5% instead of 4.72% on their valuations. Would the impact be the same for high growth & mature companies? Explain.

Posted Date: May 16, 2024 06:01 AM

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You've noticed that analysts at your company use a Market Equity Risk Premium of 5.5% when valuing

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Expert Answer:

Using a Market Equity Risk Premium MERP of 55 instead of 472 would likely r... View the full answer

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