Tag "equity analysis"

Using Risk Metrics to Gauge Prospective Equity Risk Premium

Damodaran (2011) explained that there were three methods by which to calculate a prospective Equity Risk Premium. The first is to survey investors and academics, in a similar fashion to Welch (2000). The second is to base the calculation on historical equity returns against an appropriate risk-free rate and the…

Equity Risk Premium Historical Data: 1976 to 2012

Previous articles in this series have encompassed some of the key themes with regard to the Equity Risk Premium (ERP). In this instalment I propose to examine some of these using UK data from Thomson Datastream and other sources. After an introduction to the indices used, we will look at…

Prospective Equity Risk Premium: A Glimpse Into the Future

By Allan Millar In my last article we considered historical risk premiums and explored means for quantifying Equity Risk Premium. Taking that one step further, we shall now turn our attention to calculating a prospective value of Equity Risk Premium (ERP). There is obviously no way to predict the future so…

Quantifying Equity Risk Premium

By Allan Millar In my first article we discussed what the Equity Risk Premium is. Now I would like to consider the ways in which it is calculated, a further look at its importance in Finance and then an overview of historical measurements. Calculating the Equity Risk Premium (ERP)      …

An Introduction to Equity Risk Premium

By Allan Millar Over the course of my next few articles, I will be looking at the Equity Risk Premium. To begin with, we will ask what it is. This will be followed by a brief look at its importance, historical and prospective value, as well as a consideration of…