Session 5: Estimating Hurdle Rates - The Risk free Rate

Estimate the foundation for all discount rates, a risk free rate.

[porifici]

Thank you Prof. Damodaran for your selfless generosity

[kehindeademola]

Thanks to Professor Damodaran. This is excellent!

[grenjith]

Thank you very much for uploading. We were prescribed your textbook for our corporate finance course. I couldn’t read and comprehend all that much- coz of difficulty in reading dry English, getting tired after a few pages etc. . With your video the knowledge really flows. Thanks again

[ashokanselliah]

Excellent Video lessons, hugely helpful professor.

[AswathDamodaranonValuation]

I don't think that the first link works (low risk free rates do not equate to more positive NPV projects). The rest of the logic then breaks down.

[rumpabanerjee]

Professor, understood the effect of inflation on risk free rate. But the fact that Pakistan’s risk free rate is lower than that of India seems counterintuitive.

[SAURABHSINGH-dtvt]

There is a mention of adding expected drill interest rate to inflation in local currency(at 10:15). What does expected drill interest rate mean?

[giuseppesiragusass]

I don't really understand why the risk free rate depends on the currency and not on the country. If I'm investing in an European company, changing the currency of cash flow analysis from euro to dollars wouldn't affect the intrinsic risk, but according to this I would need to change from European risk free rate to USD. Can anyone explain it, please?

[njabraham]

Estimating the CDS rate for a country that has a Moodys rating, but nothing else is a nifty work-around. Its all starting to make sense why cash flows in an out of a stock market based on news about CDS, Soverign bonds, and Moodys rating.

[abhinavbarve]

I did not understand the concept at 4:07, how do you get the weighted average duration of the cash flows? Can anyone help me with that? Thanks.

[karantibrewal]

How do you explain difference in "risk free" rates for T Bills of countries with AAA rating? For example, from your slide, the difference in the "risk free" rate in USA vs Australia? Is it just because of the expected fluctuation in the values of the currencies in question?

[Pyrea]

Thank you, thank you thank you! you just helped me for doing my  love from Indonesia

[laroybafiramadhano]

How do you find Risk free rate for Brazil (3.04%)??