anonymous
  • anonymous
Let's say we want to value a Brazilian firm in BZR, the risk free rate should be the difference between the brazilian bond rate and the default spread of said bond; and the risk premium should be the implied equity risk premium + CRP of brazil. Is this right?
Finance
jamiebookeater
  • jamiebookeater
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anonymous
  • anonymous
No it is not right. your risk free rate computation is correct but the implied equity risk premium incorporates the country risk premium and you don't need to add it

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