| Article ID: | iaor201522821 |
| Volume: | 8 |
| Issue: | 3 |
| Start Page Number: | 237 |
| End Page Number: | 244 |
| Publication Date: | Sep 1985 |
| Journal: | Journal of Financial Research |
| Authors: | Harris Robert S, Pringle John J |
| Keywords: | risk, finance & banking |
This paper provides an approach for developing risk‐adjusted discount rates that follows naturally from the standard presentation of the weighted average cost of capital. In addition to examining the implied assumptions about the valuation of corporate debt, the paper shows the pedagogic advantages of the proposed approach.