CFOs surveyed on ERP

BVWireIssue 187-3
April 18, 2018

cost of capital
cost of capital, discount rate, equity risk premium, cost of equity, capital asset pricing model (CAPM)

In a new paperJohn R. Graham and Campbell R. Harvey of Duke University analyze the history of the equity risk premium from surveys of U.S. chief financial officers (CFOs) conducted every quarter from June 2000 to December 2017. The risk premium is the expected 10-year S&P 500 return relative to a 10-year U.S. Treasury bond yield. The average risk premium is 4.42% and is somewhat higher than the average observed over the past 18 years, the paper says.
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