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Would WACC go up or down during recessions? I guess it depends on the tradeoff between risk free rate going down and risk premia going up, but does anyone have relevant industry experience that could help shed some light on this topic? Would appreciate the help!
...but the obvious answer btw is that Rp and WACC go up in periods of stress :)
High risk = high discount rates
http://www.stern.nyu.edu/~adamodar/pc/implprem/ERPbymonth.xlsx
Here you go, this should basically answer your question. Add a column of a monthly history of Rf, weight the two however you'd like, and you should be set.
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...but the obvious answer btw is that Rp and WACC go up in periods of stress :)
High risk = high discount rates