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Economics Commons

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2007

Faculty Publications

Liquidity premium

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Full-Text Articles in Economics

On The Use Of Size Premiums, Arithmetic Or Geometric Average Returns, And Liquidity Premiums In Determining Discount Rates, Hal B. Heaton Sep 2007

On The Use Of Size Premiums, Arithmetic Or Geometric Average Returns, And Liquidity Premiums In Determining Discount Rates, Hal B. Heaton

Faculty Publications

In recent court cases, a number of technical issues have arisen in determining appropriate discount rates for use in the discounted cash flow approach to valuation. This article examines three issues, reviews the literature about the issues, and summarizes the key considerations.