Uploaded July 2025 | Updated September 2026, 1 week ago
In a ritual that goes back almost three decades, I have updated my equity risk premiums, by country, semi-annually. I have no qualms about sharing these premiums, which I need for my own valuations, and since there is no secret sauce or genius behind them, sharing costs me nothing. I do worry about the possibility that analysts may be using these premiums incorrectly or do not understand the many assumptions and choices I made to arrive at them. In this session, I start by looking at the dimensions of country risk, before looking at measures of country risk (ratings, sovereign CDS and risk scores) and describing the process that I use to arrive at equity risk premiums. I talk about how the US ratings downgrade in May has disrupted the process and the changes that I have made to accommodate. Finally, I lay out a five step process for using these equity risk premiums, if you choose to use them.
Blog post: aswathdamodaran.blogspot.com/2025/07/country-risk-2025-story-behind-numbers.html
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/CountryRisk2025.pdf
ERP, by country: https://pages.stern.nyu.edu/~adamodar/pc/datasets/ctrypremJuly25.xlsx
In a ritual that goes back almost three decades, I have updated my equity risk premiums, by country, semi-annually. I have no qualms about sharing these premiums, which I need for my own valuations, and since there is no secret sauce or genius behind them, sharing costs me nothing. I do worry about the possibility that analysts may be using these premiums incorrectly or do not understand the many assumptions and choices I made to arrive at them. In this session, I start by looking at the dimensions of country risk, before looking at measures of country risk (ratings, sovereign CDS and risk scores) and describing the process that I use to arrive at equity risk premiums. I talk about how the US ratings downgrade in May has disrupted the process and the changes that I have made to accommodate. Finally, I lay out a five step process for using these equity risk premiums, if you choose to use them.
Blog post: aswathdamodaran.blogspot.com/2025/07/country-risk-2025-story-behind-numbers.html
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/CountryRisk2025.pdf
ERP, by country: https://pages.stern.nyu.edu/~adamodar/pc/datasets/ctrypremJuly25.xlsx
