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The average return on stock markets
The average long-run return on stock markets has been very stable in the past century. The average return
has been about 6 %-points above the return of long risk-free bond. (With the current interest rates this means
about 11% per annum.)
Investors can easily achieve the average stock market return in the long-run (diversified long-term investment
in stock index). This average stock market return is thus the alternative return on investors capital
Loosing the alternative return or even a part of the easily available alternative return is loosing money
Therefore investors and company owners do not (have to) accept below average returns in the long run from
any of their companies. The alternative return establishes a minimum return requirement
