Worth knowing Base rate and market risk premium

With Recommendation KFS / BW 1 E 7, the Professional Committee for Business Management has made a paradigm shift and recommended the reporting date derivation of the market risk premium. This approach, which has been applied since 1.1.2018, takes account of the historically low interest rates and corresponds to the principle of future-oriented derivation of the cost of equity. According to Recommendation KFS / BW 1 E 7, a corridor for the expected market yield of 7.5% to 9.0% is currently expected.

See also article¬†“Base rate and market risk premium according to Recommendation KFS / BW1 E 7” (RWZ March 2018) and Expert Opinion KFS BW1.¬†