Discount Rate (Risk-Free Rate and Market Risk Premium) Used for 41 Countries in 2017: A Survey

15 Pages Posted: 19 Apr 2017  

Pablo Fernandez

University of Navarra - IESE Business School

Vitaly Pershin

University of Navarra, IESE Business School

Isabel Fernández Acín

University of Navarra

Date Written: April 17, 2017

Abstract

This paper contains the statistics of a survey about the Risk-Free Rate (RF) and the Market Risk Premium (MRP) used in 2017 for 41 countries. We got answers for 68 countries, but we only report the results for 41 countries with more than 25 answers.

The average (RF) used in 2017 was smaller than the one used in 2015 in 12 countries (in 5 of them the difference was more than 1%). In 10 countries the average (RF) used in 2017 was more than a 1% higher than the one used in 2015 (see table 6). The change between 2015 and 2017 of the average Market risk premium used was higher than 1% for 11 countries (see table 6).

Most of the respondents use for Europe and UK a Risk-Free Rate (RF) higher than the yield of the 10-year Government bonds. Due to Quantitative Easing, the Risk-Free Rate (RF) and the Market Risk Premium (MRP) reported for Euro countries are negatively correlated (Spain -51%; Germany -28%; France -47%; Italy -30%)

Keywords: Market Risk Premium; Equity Premium; Required Equity Premium; Expected Equity Premium; Historical Equity Premium

JEL Classification: G12; G31; M21

Suggested Citation

Fernandez, Pablo and Pershin, Vitaly and Fernández Acín, Isabel, Discount Rate (Risk-Free Rate and Market Risk Premium) Used for 41 Countries in 2017: A Survey (April 17, 2017). Available at SSRN: https://ssrn.com/abstract=2954142

Pablo Fernandez (Contact Author)

University of Navarra - IESE Business School ( email )

Camino del Cerro del Aguila 3
28023 Madrid
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)

HOME PAGE: http://web.iese.edu/PabloFernandez/

Vitaly Pershin

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Isabel Fernández Acín

University of Navarra ( email )

Camino del Cerro del Aguila, 3
Pamplona, Navarra 31080
Spain

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