Getting a grip on foreign discount rates

Business Valuation UpdateVol. 6 No. 1
January 2000
James T. Budyak, CPA/ABV, CFA, ASA
discounts & premiums
forecast, fair market value (FMV), capital asset pricing model (CAPM), ibbotson associates, interest rate


From the above data, it would appear that both Japan and the U.S. are developed countries, implying stability and lower risk than developing countries such as Brazil, Russia, or Thailand. But in researching for interest rate data on Japan, the public data available, which includes the Economist and the Financial Times, indicate the interest rate spread on 10-year government bonds to be substantially different for Japan is the U.S., implying that Japan as much lower in risk.