TY  - BOOK
AU  - Hannes Gsell
PY  - 2021
CY  - Berlin, Germany
PB  - Peter Lang Verlag
TI  - Estimation of the Expected Market Risk Premium for Corporate Valuations
T2  - Methodologies and Empirical Evidence for Equity Markets in Key Countries
UR  - https://www.peterlang.com/document/1107946
N2  - The expected market risk premium (MRP) is a crucial parameter for corporate valuations using risk-adjusted discount rates. Despite its importance, there is no consensus on its correct estimation. This book provides a conceptual review of several estimation methods focused on implied cost of capital but also including historical averages and return decomposition. In addition, these methods are applied in a comprehensive empirical study for six key equity markets (Canada, France, Germany, Japan, UK, and USA). While professionals predominantly rely on historical averages, the empirical results demonstrate that the expected MRP is volatile over time and related to the market price level particularly during the recent financial crisis. The findings suggest to reject the usage of unconditional historical averages and to apply conditional estimates according to the «Stichtagsprinzip» instead.
KW  - Unternehmensbewertung, Kapitalkosten, Marktrisikoprämie, Stichtagsprinzip
LA  - English
ER  -