Hello,

Consider that a private equity firm is interested in buying a firm and then exiting in three years time.It's my understanding that, generally, we should be using long-term, 10-yr Treasury bonds in order to gauge risk-free rate. However, in this case since the investment horizon is only 3 years, shouldn't we be using the yield on the 3 year Treasury bond instead?

Please help

I didn't find the right solution from the internet.

References:
http://www.wallst-training.com/wstforum/viewtopic.php?f=3&t=494
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Thanks