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Hi Sir
BPP text book Practice question 9 Mover
i refer to the question, the market risk premium for the project has been estimated at 7%. since we find out inflation rate is 2%. why we no need do any adjustment on market risk premium (for eg, remove the inflation effect from market risk premium??
I am sorry but I do not have the BPP Study Text – only the Revision Kit – and so I do not have this question.
Without seeing the question, all I can say is that in general we calculate the nominal rate using the market risk premium given. If we need the real rate then it is the nominal rate we adjust using the inflation rate (not simply the risk premium).
You must never post links like that on this website.
That website is in breach of copyright and it is both illegal and unethical to download copyright material from it – anyone wishing to qualify as an accountant should be acting ethically and legally and purchase the books.
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