01632cam a22002417 4500001000600000003000500006005001700011008004100028100002200069245010200091260006600193490004100259500001600300520069100316530006101007538007201068538003601140700002301176710004201199830007601241856003701317856003601354w2219NBER20160430222003.0160430s1987 mau||||fs|||| 000 0 eng d1 aMyers, Stewart C.10aDiscounting Rules for Risky Assetsh[electronic resource] /cStewart C. Myers, Richard S. Ruback. aCambridge, Mass.bNational Bureau of Economic Researchc1987.1 aNBER working paper seriesvno. w2219 aApril 1987.3 aThis paper develops a rule for calculating a discount rate to value risky projects. The rule assumes that asset risk can be measured by a single index (e.g., beta), but makes no other assumptions about specific forms of the asset pricing model. It treats all projects as combinations of two assets: Treasury bills and the market portfolio. We know how to value each of these assets under any theory of debt and taxes and under any assumption about the slope and intercept of the market line for equity securities. Our discount rate is a weighted average of the after-tax return on riskless debt and the expected return on the portfolio, where the weight on the market portfolio is beta. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.1 aRuback, Richard S.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w2219.4 uhttp://www.nber.org/papers/w221941uhttp://dx.doi.org/10.3386/w2219