Corporate capital investors have never believed that interest rates would remain low in the euro zone

When we look at euro-zone trends in: The return on equity (RoE); The economic return on capital; The required return on listed shares , w e see that all these measures of the required return on corporate capital have remained stable and have not followed long-term interest rates downwards. Since it is very difficult to believe that the risk premium associated with holding corporate capital has increased considerably, in a situation where corporate profitability has increased sharply, there is only one explanation: corporate capital investors do not believe that the low long-term interest rates will last , and continue to make their calculations with the level of long-term interest rates prior to the subprime crisis.