Ask your own question, for FREE!
Finance 5 Online
OpenStudy (anonymous):

Hi, now that Treasury Bonds don't have an AAA rating anymore, what other financial instruments can I use as "risk free rate" to estimate the cost of equity in CAPM. thanks !!!

OpenStudy (anonymous):

By downgrading the bond from AAA to AA+, rating agency estimated that there is a default risk for US bonds (albeit small one). So to get from the bonds to risk free rate, you should subtract this small risk. The rate which is subtracted is called default spread and you can find it on prof. Damodaran's website

Can't find your answer? Make a FREE account and ask your own questions, OR help others and earn volunteer hours!

Join our real-time social learning platform and learn together with your friends!
Latest Questions
Countless7Echos: Ah trying out the whole T.V girl drawing :p (I love drawing eyes)
2 hours ago 13 Replies 6 Medals
kaelynw: starting to draw a hand
11 hours ago 17 Replies 2 Medals
Twaylor: Rate it :D (Took 2 days)
4 days ago 7 Replies 0 Medals
XShawtyX: Art, Short Writing Assignment: Imagining Landscapes
2 days ago 7 Replies 1 Medal
XShawtyX: Chemistry, Help ud83dude4fud83cudffe
5 days ago 13 Replies 1 Medal
kaelynw: tried a lil smt, the arm is off but i like the other stuff
5 days ago 27 Replies 3 Medals
kaelynw: art igg
5 days ago 14 Replies 1 Medal
Can't find your answer? Make a FREE account and ask your own questions, OR help others and earn volunteer hours!

Join our real-time social learning platform and learn together with your friends!