Equity Risk Premium Number

Dear all,

I am building DCF models for US companies and was wondering what Equity Risk Premium you guys use in the industry? Various data sources suggest 5.5% for 2022, but they do not specify how it was calculated. Historical maybe?

Prof. Damodaran from the NYU suggests 4.24% and shows the derivation, but is more than 120 bp different that the "consensus".

I would gladly appreciate if anyone takes the time to answer this.

Thanks!

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3 Comments

equityanarchist

AM

4y

Duff & Phelps supply side ERP is what we use.

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Authored by: Certified Asset Management Professional - 1st Year AssociateCertified Asset Management Pro

AN_YY

CO

4y

Thanks!

Seems to be the case for others too.

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OwwMyFeelings

PE

4y

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Equity Risk Premium Number

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Equity Risk Premium Number

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