INTRODUCTION Why do we take risk? Barring some adrenaline junkies1, most of us take risk in the search of rewards that might otherwise be out of reach. Over the Christmas holidays, I read Nigel Cliff’s The Last Crusade, The Epic Voyages Of Vasco da Gama. Da Gama and his crew took great personal risk to … Continue reading Equity Risk Premiums: The Past, The Present and maybe The Future
Can equity risk premiums predict market direction?
Equity risk premiums are useful. But can they alone tell whether the market is over- or under-valued? We take a closer look in the below article... A fellow student in the online valuation class of NYU recently requested my thoughts on a report from a top bank regarding equity risk premiums (“ERP”). The crux of … Continue reading Can equity risk premiums predict market direction?
Estimating an Equity Risk Premium for India
Note: The concept of implied equity risk premium has been developed by Prof. Aswath Damodaran. In this article, we apply his methods to determine an implied equity risk premium for India. One of the most popular ways of valuing a company is to do a discounted cash flow valuation. According to this method, the value … Continue reading Estimating an Equity Risk Premium for India