Abstract

http://ssrn.com/abstract=1805852
 
 

References (22)



 
 

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US Market Risk Premium Used in 2011 by Professors, Analysts and Companies: A Survey with 5.731 Answers


Pablo Fernandez


University of Navarra - IESE Business School

Javier Aguirreamalloa


IESE Business School

Luis Corres Avendaño


IESE

April 8, 2011


Abstract:     
The average Market Risk Premium (MRP) used in 2011 by professors for the USA (5.7%) is higher than the one used by analysts (5.0%) and companies (5.6%). The standard deviation of the MRP used in 2011 by analysts (1.1%) is lower than the ones of companies (2.0%) and professors (1.6%). Most previous surveys have been interested in the Expected MRP, but this survey asks about the Required MRP. The paper also contains the references used to justify the MRP, comments from 58 persons that do not use MRP, and comments of 110 that do use MRP. The comments illustrate the various interpretations of the required MRP and its usefulness.

Professors, analysts and companies that cite Ibbotson as their reference use MRP for USA between 2% and 14.5%, and the ones that cite Damodaran as their reference use MRP between 2% and 10.8%.

Note: proc-4/10/11-Annie

Number of Pages in PDF File: 17

Keywords: equity premium, required equity premium, expected equity premium, historical equity premium

JEL Classification: G12, G31, M21

working papers series


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Date posted: April 11, 2011  

Suggested Citation

Fernandez, Pablo and Aguirreamalloa, Javier and Avendaño, Luis Corres, US Market Risk Premium Used in 2011 by Professors, Analysts and Companies: A Survey with 5.731 Answers (April 8, 2011). Available at SSRN: http://ssrn.com/abstract=1805852 or http://dx.doi.org/10.2139/ssrn.1805852

Contact Information

Pablo Fernandez (Contact Author)
University of Navarra - IESE Business School ( email )
Camino del Cerro del Aguila 3
28023 Madrid
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)
HOME PAGE: http://web.iese.edu/PabloFernandez/
Javier Aguirreamalloa
IESE Business School ( email )
08034 Barcelona
Spain
Luis Corres Avendaño
IESE ( email )
Camino del Cerro del Águila, 3
28023 Madrid, Madrid
Spain
656940704 (Phone)
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