Oceňování 2025, 18(1):33-46 | DOI: 10.18267/j.ocenovani.299

The equity risk premium calculation based on European data

Jan Marek
European Valuation Institute, z.ú

The article focuses on estimating the equity risk premium when valuing companies located in the Czech Republic and other European countries with comparable risk profiles. It highlights key challenges associated with traditional data sources, particularly from the U.S. market, which may lead to distorted estimates. The article presents a calculation of the implied equity risk premium based on current data from European companies with similar risk characteristics. This calculation, performed using the bottom-up approach, eliminates the need for additional premiums for country risk and company size. Estimates of the implied equity risk premium for large and mid-sized companies are regularly updated and published on the European Valuation Institute website (www.evalin.org).

Keywords: Discount rate; Cost of equity; Equity risk premium; Implied equity risk premium; Company valuation
JEL classification: G12, G32

Published: September 1, 2025  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Marek, J. (2025). The equity risk premium calculation based on European data. Oceňování, 18(1), 33-46. doi: 10.18267/j.ocenovani.299
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. [4] Internetové stránky expertní skupiny Fenebris, dostupné na: http://www.market-risk-premia.com/us.html.[5] Internetové stránky KPMG, dostupné na: https://kpmg.com/nl/en/home/topics/equity-market-risk-premium.html.[6] Internetové stránky Rabel & Partner, dostupné na: https://www.rabelpartner.at/en/focal-points/company-valuation/.[7] Internetové stránky ValueTrust, dostupné na: https://www.value-trust.com/en/news-publications/#studies-presentations.[8] Fišer, R. (2023): Přístupy k odhadu implikovaných nákladů vlastního kapitálu. Oceňování, 2023, roč. 16, č. 1-2, s. 3-26.

    This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content