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[sharechat] Question of required return


From: "Chris Zingel" <chris_zingel@bigfoot.com>
Date: Thu, 7 Oct 1999 09:01:56 +1300



For those that use Discount Cash Flow model (DCF),where do you get your
information on calcuating the required return for equity. The typical method
that most finance books mention is the CAPM which requires information on
betas. The  method sounds a bit dubeious but it does require information on
betas. If you have got a source for those betas I would be really
interested. A rule of thumb  I've  come across is adding  7% onto required
return for debt. I got that  7% from a finance book orginating from the
states so it perhaps doesn't hold very well in NZ.

Your experiences would be much appreciated
Chris


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