Twenty Third Floor

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Why you’re mis-estimating the Equity Risk Premium #5

October 4, 2010

David Kirk

You’ve been swayed by others’ use of high ERP estimates

Your ERP estimate may well be too high if you have been informed by ERP estimates widely used in corporate finance. For some of the previously discussed reasons, many practitioners overestimate the ERP dramatically, ending up with estimates in the range of 7% to 10%.

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One response to “Why you’re mis-estimating the Equity Risk Premium #5”

Mis-estimating the Equity Risk Premium || Twenty Third Floor

6 October 2010

[…] Reason #5 – You’ve been swayed by othersâ€™ use of high ERP estimates […]

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