RT Journal Article
SR Electronic
T1 The Equity Premium
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 104
OP 111
DO 10.3905/jpm.2004.319936
VO 30
IS 2
A1 Paul Bostock
YR 2004
UL https://pm-research.com/content/30/2/104.abstract
AB Investors require additional expected returns for bearing costs and risks. The equity premium is the compensation investors require for bearing the additional costs and risks of equity investment compared with government bonds (or cash). In this framework, the equity premium is constructed by assembling the premiums paid for each source of cost and risk. The results appeal to intuition and are closer to theoretical expectations than historical equity and bond return comparisons.