need some help for work here…anyone here knows the current market risk premium in the united states? or any website i can go look for that? Thanks!!!
Just use 6%.
thanks!! the current risk free rate is about 3%, so the market risk is about 10%. is it correct?
Well if you are using 6% as MRP and 3% as Rf then 6+3=9 not 10
Long term for large caps, sounds about right. I would allow plenty of room for company specific risks.
Why don’t you calculate the average return over treasuries over the past 20-30 years? easy enough to do and should give you a historical basis for your analysis.
agreed with darkhelmet. for risk-free rate suggest taking 90day moving avg for 10Y UST.
fwiw, here’s a discussion: http://pages.stern.nyu.edu/~adamodar/pdfiles/papers/riskprem.pdf