Market value of a business and discount rate focusing on the capital market risk premium - part 1[Tržní hodnota podniku a diskontní míra se zaměřením na rizikovou prémii kapitálového trhu - 1. část]

The objective of the article is to seek an answer to the question of how to estimate the cost of equity and, in particular, the risk premium of the capital market for income methods within estimation of the market value of a business. In current valuation practice, the use of historical capital market premiums predominates significantly. However, this procedure is neither theoretically consistent with the CAPM model nor fully consistent with the market value concept. The issue of how to use market data and market expectations for the future has long been addressed by some Western authors. In doing so, they concluded that the most appropriate would be based on normal income models for the valuation of shares, from which we can estimate the required return on the principle of the future internal yield percentage. After deducting risk-free rate, we then obtain an ex-ante risk premium estimate. These models exist in several variants. This first part of the article discusses a group of models based on dividends and FCFE. The second part of the article will deal with models based on residual profits. In the future, we would like to reach estimates of risk premiums directly for central European conditions, because the ex-ante approach opens the way for this.