Money & Business
Estimating the cost of equity
...et al. (2002) using historical returns during the period 1900–2000. They showed that, during this period, UK equities achieved mean annual nominal returns of 12.1% compared with 6.1% for UK gilts. Their work also demonstrated how three-month UK Treasury bills yielded, on average, an annual 5.1% in nominal terms over the same period. Therefore, in the past, companies...