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The Equity Risk Premium (ERP) is a key input used to calculate the cost of capital within the context of the Capital Asset Pricing Model (“CAPM”) and other models. Duff & Phelps regularly reviews fluctuations in global economic and financial market conditions that warrant a periodic reassessment of the ERP and the accompanying risk-free rate.
Duff & Phelps has published its recommended U.S. ERP and corresponding risk-free rate since 2008. Download a table summarizing these recommendations over the period January 2008 – present.
Historical recommendations:
Duff & Phelps U.S. Normalized Risk-Free Rate Lowered from 3.0% to 2.5%, Effective June 30, 2020
Duff & Phelps U.S. Equity Risk Premium Recommendation Decreases from 5.5% to 5.0%, Effective December 19, 2019
Duff & Phelps Increases Recommended U.S. Equity Risk Premium from 5.0% to 5.5%, effective December 19, 2018
Duff & Phelps Decreases U.S. Equity Risk Premium Recommendation to 5.0%, Effective February 28, 2013
Duff & Phelps Decreased Its Recommended U.S. Equity Risk Premium to 5.5% Effective January 15, 2012
Interactive, web-based tool that can assist you in better analyzing cost of capital