Market risk premium used in 2010 by analysts and companies: A survey with 2.400 answers
AbstractThe average MRP used by analysts in the United States and Canada (5.1%) was similar to the one used by their colleagues in Europe (5.0%), and United Kingdom (5.2%). But the average MRP used by companies in the United States and Canada (5.3%) was smaller than the one used by companies in Europe (5.7%), and United Kingdom (5.6%). The dispersion of the MRP used was high, but lower than that of the MRP used by professors: the average range of MRP used by analysts (companies) for the same country was 5.7% (4.1%) and the average standard deviation was 1.7% (1.2%). These statistics were 7.4% and 2.4% for the professors. Most previous surveys have been interested in the Expected MRP, but this survey asks about the Required MRP. The paper also contains the references that analysts and companies use to justify their MRP, and comments from 89 respondents that illustrate the various interpretations of what is the required MRP.
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Bibliographic InfoPaper provided by IESE Business School in its series IESE Research Papers with number D/912.
Length: 25 pages
Date of creation: 07 Mar 2011
Date of revision:
market risk premium; required equity premium; expected equity premium; historical equity premium;
Find related papers by JEL classification:
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-30 (All new papers)
- NEP-CFN-2011-05-30 (Corporate Finance)
- NEP-FMK-2011-05-30 (Financial Markets)
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- Péter Benczúr & Gábor Kátay & Áron Kiss, 2012. "Assessing changes of the Hungarian tax and transfer system: A general-equilibrium microsimulation approach," MNB Working Papers 2012/7, Magyar Nemzeti Bank (the central bank of Hungary).
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