The Bovespa (Brazilian equity index) is at 15000. The dividends on the index last year were 5% of

The Bovespa (Brazilian equity index) is at 15000. The dividends on the index last year were 5% of the index value, and analysts expect them to grow 15% a year in real terms for the next 5 years. After the fifth year, the growth is expected to drop to 5% in real terms in perpetuity. If the real riskless rate is 6%, estimate the implied equity risk premium in this market.; The Bovespa (Brazilian equity index) is at 15000. The dividends on the index last year were 5% of the index value, and analysts expect them to grow 15% a year in real terms for the next 5 years. After the fifth year, the growth is expected to drop to 5% in real terms in perpetuity. If the real riskless rate is 6%, estimate the implied equity risk premium in this market.


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