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HI Sir
I noticed for question 3, chap 20 and question 5, chap 21, in the Practice questions that the Rf was ignored when we used the formula. Both questions had equity risk premium percentage and I assume this is why.
So can you kindly make clear, that we ignore substracting the Rf from (E(r m) once it is a equity risk premium percent?
I do make this clear in my free lectures (and I hope that you are not used the notes without watching the lectures that work through them because this would be a complete waste of time).
The equity risk premium is the excess of the market return over the risk free rate.
Thank you Sir.
Yes I do work with the notes as well as listen to the lectures. Thank you for your clarity.
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