What Is Market Risk Premium?
The market risk premium, also known as the equity risk premium (ERP), is a fundamental concept in finance that represents the excess return investors expect to earn from investing in the stock market over a risk-free rate, such as U.S. Treasury bonds. It is a critical input in the Capital Asset Pricing Model (CAPM), discounted cash flow (DCF) valuations, and cost of equity calculations. Understanding the market risk premium helps investors, analysts, and corporate finance professionals make informed decisions about asset allocation, project evaluation, and portfolio management.
Our free market risk premium tool provides country-specific risk premiums and total equity risk premiums for over 190 countries across all continents. Whether you are conducting a cross-border valuation, assessing emerging market investments, or building a global portfolio, this data gives you the risk metrics you need to make better investment decisions.
How to Use This Market Risk Premium Tool
- 1
Browse Country Data
The table displays market risk premium data for all available countries. Each row shows the country name, continent, country risk premium, and total equity risk premium.
- 2
Compare Across Regions
Use the continent column to compare risk premiums across different regions. This helps identify which geographic areas carry higher or lower investment risk for your global portfolio strategy.
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Export or Refresh Data
Click the Refresh button to reload the latest data, or use the Export CSV button to download market risk premiums for offline analysis in Excel, Google Sheets, or financial modeling tools.
Understanding Country Risk Premium in Valuation
The country risk premium (CRP) quantifies the additional return investors require for investing in a specific country relative to a mature, stable market such as the United States. This premium reflects risks including political instability, sovereign default risk, currency depreciation, regulatory uncertainty, and macroeconomic volatility. Analysts typically derive the CRP from sovereign credit default swap (CDS) spreads, sovereign bond yield spreads over U.S. Treasuries, or composite risk scoring models.
When performing a DCF valuation for a company operating in an emerging market, the total equity risk premium is used as the equity risk premium input in the CAPM formula: Cost of Equity = Risk-Free Rate + Beta × Total Equity Risk Premium. The total equity risk premium combines the base mature market premium with the country-specific risk premium, giving a more accurate discount rate for international investments.
Why Use Our Market Risk Premium Tool?
190+ Countries Covered
Access risk premium data for countries across every continent. Compare developed, emerging, and frontier markets side by side.
Ready for Valuation Models
Export data directly into your DCF models, CAPM calculations, and cost of equity analyses with one-click CSV download.
100% Free
No subscription, no hidden fees. Access market risk premium data and export to CSV completely free of charge.