For EOM2 (Scenarios and Futurism), we are given a report produced by equity analysts within our company that the following is true for Country X:
i_RF-US = 6.75% (risk-free interest rate in the US)
ERP_US = 5.50% (US equity risk premium)
SS_X = 5.75% (sovereign spread to country X)
CE_X = 0.00% (extra return for taking on the currency exchange risk).
But then we are asked to write a formal report concluding with estimates of reasonable ranges of each of SS_X, CE_X, and R_X.
How can we go about coming up with "estimated ranges"? Don't we already have the exact values for country X given precisely by equity analysts?
I'm so confused. Any help/insights would be greatly appreciated!
i_RF-US = 6.75% (risk-free interest rate in the US)
ERP_US = 5.50% (US equity risk premium)
SS_X = 5.75% (sovereign spread to country X)
CE_X = 0.00% (extra return for taking on the currency exchange risk).
But then we are asked to write a formal report concluding with estimates of reasonable ranges of each of SS_X, CE_X, and R_X.
How can we go about coming up with "estimated ranges"? Don't we already have the exact values for country X given precisely by equity analysts?
I'm so confused. Any help/insights would be greatly appreciated!
EOM2: estimate of reasonable ranges of...