Bourne analyzes SA Telecom in greater detail and determines that its home market experiences high, unpredictable, and volatile rates of inflation. To help calculate the company’s required rate of return, he uses the Exhibit 2.
EXHIBIT 2
BASIS FOR CALCULATING SA TELECOM’S RETURN
| Real country return | 8.60% |
| Rate of inflation | 4.45% |
| Industry | 1.60% |
| Size | 1.45% |
| Leverage | –0.85% |
Using the data in Exhibit 2, SA Telecom’s real required rate of return is closest to:
- 10.80%.
- 15.25%.
- 11.65%
Solution
A is correct.
Real required rate of return = Country return ± Industry adjustment ± Size adjustment ± Leverage adjustment
| Real country return | 8.60% |
| ± Industry | 1.60% |
| ± Size | 1.45% |
| ± Leverage | −0.85% |
| Required rate of return | 10.80% |
我想问下此题属于build up method的吗？这种方法究竟要考虑几个因素，有没有确定公式？此题不用通货膨胀我是明白的，但是比如再给一个special risk要不要加上？还是只要题目给出的因素全都要考虑？
