Update on Market Discount Rates as at 30 September 2021
The market was relatively flat over the quarter to 30 September 2021 with the ASX rising only 0.3% since June 2021 despite stronger earnings growth expectations. With the risk-free rate remaining unchanged, this implies an increase in the EMRP and market discount rates over the period as set out below.
Market discount rates have declined slightly
Sep 2021 | Jun 2021 | |
Rf | 1.49% | 1.49% |
Index level (All Ords) | 7,630 | 7,585 |
Forward PE (All Ords) | 17.8x | 19.2x |
EMRP | 6.75% | 6.5% |
Market cost of equity | 8.2% | 8.0% |
Source: Leadenhall
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