What risk premium do analysts use for your country? From Venezuela’s 29% to the Netherlands’ 5.6%

Global Economy

Pablo Fernández | We sent a short email (see exhibit 1) on March, 2023 to more than 15,000 email addresses of finance and economics professors, analysts and managers of companies obtained from previous correspondence, papers and webs of companies and universities. We asked about the Risk-Free Rate (RF) and the Market Risk Premium (MRP) used “to calculate the required return to equity in different countries”.

By March 31, 2023, we had received 1,717 emails. 194 persons answered that they do not use MRP (see table 1), most of them use Km (required return to equity) but do not use MRP nor RF. The remaining emails had specific Risk-Free Rates and MRPs used in 2023 for one or more countries. We would like to sincerely thank everyone who took the time to answer us.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.