Market Risk Premium
Obtains the equity market risk premium by country – the country default spread plus the equity risk premium, following the approach popularized by Aswath Damodaran – which is widely used to calibrate country-specific costs of equity and discount rates in a multi-country setting.
Also known as: country risk premium, Damodaran equity risk premium.
Market Risk Premium in Python
get_market_risk_premium is part of the Toolkit module of the open-source Finance Toolkit. Install it with:
pip install financetoolkit -U
Then call get_market_risk_premium as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(["AMZN", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")
market_risk_premium = toolkit.get_market_risk_premium()
market_risk_premium.loc[['United States', 'Germany', 'Brazil']]
Which returns:
| Country | Continent | Country Risk Premium | Total Equity Risk Premium |
|---|---|---|---|
| United States | North America | 0.23 | 4.46 |
| Germany | Europe | 0 | 4.23 |
| Brazil | South America | 3.24 | 7.47 |
Parameters
get_market_risk_premium accepts the following parameters:
- overwrite (bool): Defines whether to overwrite the existing data.