When determining what to pay for a company or asset people typically discount the future cashflows by the cost of equity, which is defined as the 'risk free rate'
(Rf) + the market risk premium
E(R) = Rf + b (Rm- Rf). Assuming a debtless company.
The question I have is whether the discount rate E(R) is the same for every agent, regardless of the opportunities available to them. I am a private individual with a saving account with a maximum return of .5%. Institutions can access risk free ~1% government bonds (which are generally sold in large blocks and thus unavailable to individual investors).
Should this influence the relative cost of capital what thus different agents should be willing to pay for an asset?