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Discount Rate

AAiden7y ago
Hi Sir, Dec 2018 (Q3) Why the discount rate need to minus 4% risk free rate? But, June 2014 (Q2 (a)) do not need to minus risk free rate?
John MoffatJohn MoffatTutor7y ago#1
In December 2018 you are given the cost of equity. In June 2014 you are given the market premium (which is already after subtracting the risk free rate).
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