Country Risk Premium Calculator

Estimate the country risk premium using Damodaran's sovereign spread approach. Compute risk-adjusted cost of equity, WACC, and valuation impact.

Sovereign Spread (bps)

Equity Market Volatility (%)

Bond Market Volatility (%)

Risk-Free Rate (%)

Mature Market ERP (%)

Asset Beta

Debt Weight in Capital (%)

Cost of Debt (%)

Corporate Tax Rate (%)

Investment Horizon (Years)

Tab to move between fields

Country Risk Premium (%)

Equity/Bond Volatility Ratio1.67

Base Cost of Equity (%)10%

Adjusted Cost of Equity (%)15%

CRP Equity Increment (%)5%

Base WACC (%)8.35%

Adjusted WACC (%)11.85%

WACC Increment (%)3.5%

Risk-Adjusted Discount Factor0.33

Valuation Impact (%)-27.23%

How to Use This Calculator

Enter Sovereign Spread (bps), Equity Market Volatility (%), and Bond Market Volatility (%).
Set Risk-Free Rate (%), Mature Market ERP (%), and Asset Beta.
Adjust Debt Weight in Capital (%), Cost of Debt (%) as needed.
Review the Country Risk Premium (%) (%) result.
Use Equity/Bond Volatility Ratio and Base Cost of Equity (%) (%) to inform your decision.

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