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IFRS 9 now entails that for the valuation of own liabilities a company needs to include its own credit risk. Is then the assumption that debt beta is zero still in compliance with the requirements?
We only assume that the debt beta is zero when using the asset beta formula. When valuing unquoted debt we certainly never use CAPM.
Thanks John, I think I need to do some more reading 🙂
Awesome lectures btw. Just tried to watch others (for diversity purposes), but gave up after 5 mins. You’re seriously a great lecturer!
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