kpmg equity market risk premium 2021
Over the last two decades, unemployment has hovered around 20%. Advisory works with the worlds leading organizations to create and protect the sustainable value of their business. Together, slow economic growth and stringent labor laws have prevented firms from hiring workers. 4.41% country risk premium + 5.23% mature market risk premium. Get full access to all features within our Business Solutions. You only have access to basic statistics. The 5.5% ERP recommendation is to be used with a normalized risk-free rate of 2.5%, implying a "base" U.S. cost of equity capital estimate of 8.0% (2.5% + 5.5%). The typified, uniform risk-free rates are derived from yield curves based on regression parameters and results published by central banks (e.g., Deutsche Bundesbank, Bank of England, Federal Reserve). For the market and country risk premium, we conduct our own analyses and calculations. Please do not hesitate to contact me. How can investors determine the equity risk premiums for individual companies? 0000005934 00000 n 0000056765 00000 n The confluence of macroeconomic factors currently at play is unlike what weve seen in a long time. 5765 16 This suggests that investors demand a slightly lower return for investments in that country, in. 0000003412 00000 n 0000056329 00000 n Date Written: March 23, 2022 Abstract The equity risk premium is the price of risk in equity markets, and it is not just a key input in estimating costs of equity and capital in both corporate finance and valuation, but it is also a key metric in assessing the overall market. Access exclusive data and research, personalize your experience, and sign up to receive email updates. 0 Duff & Phelps regularly reviews fluctuations in global economic and financial conditions that warrant periodic reassessments of ERP. Consumer confidence also saw some improvement since its 2020 low in April, but it remains far below the levels observed prior to the outbreak. As a Premium user you get access to background information and details about the release of this statistic. This paper contains the statistics of a May 2021 survey about the risk-free rate (RF) and the market risk premium (MRP). 2. The price of risk is what investors demand as a premium, an extra return over and above what they can make on a guaranteed investment (risk free), to invest in a risky asset . 0000001865 00000 n If you are an admin, please authenticate by logging in again. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). Based on current market conditions, Duff & Phelpsdecreased its U.S. ERP recommendation from 6.0% to 5.5% when developing discount rates as of December 9, 2020, and thereafter, until further guidance is issued. The accompanying audited consolidated financial statements, related note disclosures, and other financial information contained in the management's discussion and analysis of Ne The unemployment rate in six of the G7 countries hovers near the lowest in a century. With strict price controls, negative interest rates, and an aging population, the country is expected to see an inflation rate of just 1.4% in 2023. About the 2022 Fair Valuation survey. Available: https://www.statista.com/statistics/664840/average-market-risk-premium-usa/, Average market risk premium in the United States from 2011 to 2022, Available to download in PNG, PDF, XLS format, Value of traded shares in the Middle East July 2020 by exchange, Value share of outstanding bonds by GCC country 2021, Users of various mobile payment apps in Saudi Arabia in 2020, with forecasts to 2025, Share of online financial services usage Saudi Arabia 2022, Distribution of bank liabilities in Saudi Arabia by type Q3 2022, Most popular in-store payment methods in Saudi Arabia 2020-2021, Annual number of credit card transactions in Saudi Arabia 2013-2021, per capita, Industry revenue of activities auxiliary to financial service & insurance activities in Saudi Arabia 2012-2024, Industry revenue of financial and insurance activities in Saudi Arabia 2012-2024, Industry revenue of financial service activities, except insurance & pension funding in Saudi Arabia 2012-2024, Value of outstanding bonds by GCC country 2021, Number of listed companies largest stock exchange operators globally 2022, Distribution of Islamic financial asset value worldwide in 2021, by country, Value of takaful assets worldwide 2012-2021, Distribution of global Islamic fund assets 2021, by domicile, Average market risk premium in New Zealand 2011-2016, Average market risk premium in Australia 2011-2016, Average market risk premium in Mexico 2011-2016, Median market risk premium in selected countries worldwide 2022, Average market risk premium in Russia 2011-2022, Average market risk premium in Brazil 2011-2016, Average market risk premium in Canada 2011-2022, Average market risk premium in Japan 2011-2016, Average market risk premium in Italy 2011-2018, Average market risk premium in the Netherlands 2011-2016, Average market risk premium in selected countries worldwide 2022, Average risk free investment rate in Belgium 2015-2022, Average risk free investment rate in the Netherlands 2015-2022, Average risk free rate in Italy 2015-2018, Average required return to equity in the Netherlands 2015-2022, Average required return to equity in Turkey 2015-2022, Average required return to equity in Greece 2015-2022, Value of M&A deals in Russia 2020, by type and industry, Climate bonds issuance Philippines 2020, by issuer, Find your information in our database containing over 20,000 reports. In Europe, Bosnia and Herzegovina is estimated to see the highest unemployment rate, at over 17%. Business Solutions including all features. To buy a product from KPMG Atlas, you must be registered and signed in. Incident response, digital forensics, breach notification, managed detection services, penetration testing, cyber assessments and advisory. Investors generally expect to see a higher return from investments that involve a greater level of risk - investing in stocks is riskier than putting your money into an ultra-low risk . 2023 Kroll, LLC. View methodologies, annexes, guides and legal documents. Accessed March 05, 2023. https://www.statista.com/statistics/664840/average-market-risk-premium-usa/, Social Science Research Network. As a Premium user you get access to background information and details about the release of this statistic. Typically, monetary policy moves like these takes about a year to take peak effect. "Average market risk premium in selected countries worldwide in 2022." Market Risk Premia Market Risk Premia Application example Market Risk Premia of international stock markets as of 31 January 2023 0.834 0.834 10.309 10.309 Austria Australia Belgium Brazil Canada Swiss China Germany Denmark Estland Spain Finnland France United Kingdom Greece Hongkong Indonesia India Italy Japan South Korea Mexico Malaysia 0000004162 00000 n See: https://www.bea.gov/news/2021/gross-domestic-product-4th-quarter-and-year-2020-advance-estimate. This statistic is not included in your account. You need at least a Starter Account to use this feature. Summary of our observations of the key factors influencing the equity market risk premium. I have over 7 years working experience in auditing, finance and accounting in the following industries: consultancy, retail, public sector, insurance and Financial technology. Profit from the additional features of your individual account. For example, a consumer products business may weigh exposure based on the location of their revenue. This list includes investable products traded on certain exchanges currently linked to this selection of indices. Implied Equity Risk Premium Update Implied ERP on March 1, 2023 = 4.78% (Trailing 12 month, with adjusted payout); 5.58% (Trailing 12 month cash yield); 5.50% (Average CF yield last 10 years); 5.34% (Net cash yield); 4.53% (Normalized Earnings & Payout) KPMG is a global network of professional firms providing Audit, Tax & Advisory services. As soon as this statistic is updated, you will immediately be notified via e-mail. The Russia-Ukraine conflict and the lingering effects of the COVID-19 pandemic are also still at play in this years inflation forecasts. statistic alerts) please log in with your personal account. Exhibit 2 shows the fluctuations in the base U.S. cost of equity since year-end 2019 to the present, using the Duff & Phelps Recommended U.S. ERP and accompanying risk-free rate. Heightened regulatory concerns and vigilance, together with increased investor scrutiny, have led to increased demand for independent expert advice. Duff & Phelps (Rebranded as Kroll) has published its recommended U.S. ERP and corresponding risk-free rate since 2008. End-to-end governance, advisory and monitorship solutions to detect, mitigate and remediate security, legal, compliance and regulatory risk. All rights reserved. The analysis applies fractional integration methods to data for the US, Germany and Japan, and for robustness purposes considers different time horizons (2, 5 and 10 years) and frequencies (monthly and weekly). He . 1.As published in the Duff & Phelps Cost of Capital Navigator atdpcostofcapital.com. Kroll regularly reviews fluctuations in global economic and financial market conditions that warrant a periodic reassessment of the ERP and the accompanying risk-free rate. This client alert contains a more expanded discussion of the rationale used to support the decrease in the Duff & Phelps-recommended U.S. ERP on December 9, 2020, and is accessible here: https://www.duffandphelps.com/insights/publications/cost-of-capital/duffandphelps-recommended-us-equity-risk-premium-decreased-december-2020 Corporate income tax rates are based on the KPMG tax survey. Which ESG Risks Are Affecting Your Portfolio? Kroll Recommended U.S. Equity Risk Premium and Corresponding Risk-Free Rates to be Used in Computing Cost of Capital: January 2008 - Present, /en/insights/publications/cost-of-capital/recommended-us-equity-risk-premium-and-corresponding-risk-free-rates, /-/media/assets/images/news/featured-images/2020/mifid-ii-regime-challenges-new.jpg?extension=webp, Impact of High Inflation and Market Volatility on Cost of Capital Assumptions, Effective October 18, 2022. You need a Statista Account for unlimited access. Increase the relevance of your organisation for now and later, A clear purpose and positive impact on the planet and its people matters like never before. KPMG Valuation Data Source aggregates all key cost of capital parameters - including beta factor and credit spread. (Its worth noting the tech sector makes up just 4% of the workforce). This research bulletin prepared by the Dutch Valuations practice summarises our observations regarding the key factors influencing the equity market risk premium since the onset of the financial crisis. Potential Reward Every country presents varying degrees of risk based on local conditions. Then you can access your favorite statistics via the star in the header. Currently, you are using a shared account. 656 0 obj <>/Encrypt 646 0 R/Filter/FlateDecode/ID[]/Index[645 21]/Info 644 0 R/Length 69/Prev 626475/Root 647 0 R/Size 666/Type/XRef/W[1 2 1]>>stream Access to this and all other statistics on 80,000 topics from, Show sources information But as some economies navigate a strong labor market against high inflation and hawkish monetary policy, others are facing more challenging conditions. Should you require more detailed information on the exact methodologies used to derive the equity market %]&8e MZ])<9Ed;IC+8:{8Zm5%aUM`L=#G=*1|-}#-owe`I"$/SFCj*jbj&pIpnEG.W*|CmgkZ*iCS#P0wW1_ngnIv!wO}CW % YX]BHK##BlXV'6e3(TZ52A)K\x'+gK Financial statement audits give assurance over information used by investors. Please note that this is a summary document only. It documents the evolution of these factors from March 25, 2020 through November 30, 2020, and their corresponding impact on the ERP. Please create an employee account to be able to mark statistics as favorites. Download a tablesummarizing these recommendations over the period January 2008 present. May 23, 2022. Sorry, something went wrong. Many Asian countries, notably Japan, Taiwan, and China, are all predicted to see inflation lower than 3% in the upcoming year. Kroll is not affiliated with Kroll Bond Rating Agency, The good news is that inflation can potentially be tamed by other means. It is followed by North Macedonia (15.0%) and Spain (12.7%). Kroll U.S. Normalized Risk-free Rate Increased from 2.5% to 3.0%, Effective April 7, 2022 Duff & Phelps Recommended U.S. Equity Risk Premium Decreased from 6.0% to 5.5%, Effective December 9, 2020 Duff & Phelps U.S. Normalized Risk-Free Rate Lowered from 3.0% to 2.5%, Effective June 30, 2020 "Average market risk premium in the United States from 2011 to 2022." historical high valuations. Elected to represent program in the university's Student Leadership Team. While the above countries fight to sustain their purchasing power, some parts of the world are expected to continue faring exceptionally well against the backdrop of a widespread cost-of-living crisis. Get full access to all features within our Business Solutions. to incorporate the statistic into your presentation at any time. Read more on our study Gemarkeerd als . The equity risk premium is the price of risk in equity markets, and it is not just a key input in estimating costs of equity and capital in both corporate finance and valuation, but it is also a key metric in assessing the overall market. Importantly, even countries headquartered in mature markets have international risks if they carry out operations in other countries. To combat inflation, monetary policy has been shown to take over three or even four years. There are several risks that may impact the shape of the U.S. economic recovery and the pattern of behavior of financial markets in 2021, including: Based on global economic and financial market conditions in late November and early December 2020, which took into consideration the outlook and potential risks for 2021, we found sufficient support to decrease our U.S. ERP recommendation to 5.5% as of December 9, 2020 and thereafter, until further notice. Importantly, even countries headquartered in mature markets have international risks if they carry out operations in other countries. 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. margins or growth). Our multi-disciplinary approach and deep, practical industry knowledge help clients meet challenges and respond to opportunities. The 5.5% ERP recommendation is to be used with a normalized risk-free rate of 2.5%, implying a base U.S. cost of equity capital estimate of 8.0% (2.5% + 5.5%).1. These reviews warrant a periodic reassessment of the equity risk premium (ERP) and the accompanying risk-free rate and key inputs used to calculate the cost of equity capital in the context of the Capital Asset Pricing Model (CAPM) and other models used to develop discount rates. The inflation differential is calculated by us, based on inflation estimates provided by Economist Intelligence Unit. Our offer extends from quantitative analytics on derivative risk . 5-2021 Evaluating Methods of Calculating Country-Specific Market Risk Premium Lora Taylor Follow this and additional works at: https://scholarworks.uark.edu/finnuht . to incorporate the statistic into your presentation at any time. World-wide expert services and tech-enabled advisory through all stages of diligence, forensic investigation, litigation and testimony. Values taken from multiple publications. To identify suitable peer companies, the user can resort to precise search functions, e.g. Even as the January ISM Purchasing Managers Index posted lower readings, hitting 47.4a level of 48.7 and below generally indicates a recessionfactories are not laying off many workers. hbbd``b`o d; $:@@+5LL S % Like the U.S., many advanced countries are witnessing labor market strength, especially in the United Kingdom, Asia, and Europe, although how long it will last is unknown. 5Source: FDAs Emergency Use Authorization information available at: https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization#coviddrugs. All rights reserved. The equity risk premium is the additional return an investor expects for investing in the stock market to help compensate them for the extra risk it involves. See: /en/insights/publications/valuation/valuation-insights-first-quarter-2021/duff-and-phelps-recommended-us-equity-risk, https://www.bea.gov/news/blog/2020-12-22/gross-domestic-product-third-estimate-corporate-profits-revised-and-gdp, https://www.bea.gov/news/2021/gross-domestic-product-4th-quarter-and-year-2020-advance-estimate, https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization#coviddrugs, https://covid.cdc.gov/covid-data-tracker/#vaccinations. To further accelerate the input process, sector betas can be accessed for an initial indication. Additionally, the Nordic M&A activity is continuously high with the TMT sector outperforming other sectors based on deal count in Q1 2021. The resulting value is the country equity risk premium. (May 23, 2022). Of course, the pandemic recovery has impacted these figures. trailer Lower manufacturing orders, declining consumer expectations, and shorter work weeks are among the indicators it tracks. xref 0000003710 00000 n U.S. real GDP collapsed 5% and 31.4% in the first and second quarters of 2020, respectively, but it grew in real terms by an annualized 33.1% in the third quarter.1,2 In the fourth quarter, U.S. equity markets reached new all-time highs, spurred by optimism about the new COVID-19 vaccines, the expectation of continued low interest rates through at least 2023, the resolution of the U.S. presidential election, and improved business confidence. New York NY 10055. Equity Risk Premium Yardeni Research, Inc. March 1, 2023 Dr. Edward Yardeni 516-972-7683 eyardeni@yardeni.com Joe Abbott 732-497-5306 jabbott@yardeni.com Please visit our sites at www.yardeni.com blog.yardeni.com thinking outside the box. KPMG in the US. Credit spreads are estimated based on a companys individual rating on a given date. Jersey City, NJ. This research bulletin prepared by the Dutch Valuations practice summarises our observations regarding the key factors influencing the equity market risk premium since the onset of the financial crisis. 4. AIM IPOs have dramatically increased over the last year, jumping from 16 in 2020 to 55 in 2021. Inflation surged on a global scale in 2022, hitting record-level highs in many countries. . The 5.5% ERP recommendation is to be used with a normalized risk-free rate of 2.5%, implying a base U.S. cost of equity capital estimate of 8.0% (2.5% + 5.5%). Overview and forecasts on trending topics, Industry and market insights and forecasts, Key figures and rankings about companies and products, Consumer and brand insights and preferences in various industries, Detailed information about political and social topics, All key figures about countries and regions, Market forecast and expert KPIs for 600+ segments in 150+ countries, Insights on consumer attitudes and behavior worldwide, Business information on 60m+ public and private companies, Detailed information for 35,000+ online stores and marketplaces. Kroll OnTrack Inc. or their affiliated businesses. All data is as of July 1, 2020. Since the beginning of the financial crisis in 2008, executives and valuation practitioners alike have observed major changes in the underlying parameters that drive, and are used to derive, the value of companies. All rights reserved. Our privacy policy describes how your data will be processed. In this case, the cash flow is formulated as dependent on the capital structure and the tax advantage from the debt is considered in the total cash flow instead of in the cost of capital (WACC). According to the source, the report is presenting required market risk premium (or equity premium) defined as: "incremental return of a diversified portfolio (the market) over the. <>stream Duff & Phelps continuously monitors global economic and financial market conditions that may indicate a change in the indicated ERP and will update our guidance as frequently as warranted. Our services include claims and noticing administration, debt restructuring and liability management services, agency and trustee services and more. Unemployment is forecast to tick higher in 2023, but so far red-hot labor markets are resisting this trend on a global scale. Organization ", Leading financial centers in the Middle East and Africa 2020, Distribution of global Islamic banking assets 2021, by country, Distribution of sovereign sukuk issuance globally 2021, by country. In the above graphic, we map unemployment forecasts in 2023 using data from the IMFs World Economic Outlook. Participants representing 89 registered investment company fund groups completed it. The ideal entry-level account for individual users. Exhibit 2: U.S. Base Cost of Equity (= U.S. Normalized Risk-Free Rate + Duff & Phelps Recommended U.S. ERP). We also present an overview of our analysis and conclusions regarding an appropriate equity market risk premium to be applied as per 31 December 2022. Table Of Contents Table Of ContentsTable Of Contents Venezuela, Sudan, and Yemen are tied for the highest equity risk premium. Even as the tech sector reports mass layoffs, unemployment claims in the U.S. fall below recent averages. 55 East 52nd Street 17 Fl Subjects include Financial Accounting, Quantitative Methods, Economics, Financial Markets , Excel, Management Control Systems, Advanced Finance, Competitive Strategy, Corporate Finance Knowing the Market and the Consumer, Marketing, Organisational Behaviour, Operations and Supply Chain Management, Marketing Strategy . 6Source: Centers for Disease Control and Prevention (CDC) website at: https://covid.cdc.gov/covid-data-tracker/#vaccinations New York NY 10055. statistic alerts) please log in with your personal account. Learn more about how Statista can support your business. Total IPO funds raised in London were 13.9 billion. This statistic is not included in your account. Consider the manufacturing sector. endstream endobj startxref He graduated from the Gabelli School of Business at Fordham University . 1 I 2021 Asset management opportunities & risk report 2021 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of . At the same time, the labor market is absorbing workers who have lost employment. Based on that rating, determine the credit spread, which is the additional yield over a risk-free investment. S&P 500 Annual Dividend Futures 2024 Index, S&P U.S. Equity Momentum 40% VT 4% Decrement Index. As investors look to diversify internationally, its critical to consider two factors: Equity risk premiums serve as a guide that can help investors compare country risk, and the additional return potential they should expect for tolerating that risk. Read more. When investors purchase stocks internationally, they are exposed to additional risks. Goldman Sachs & Co. Dec 2008 - May 20112 years 6 months. Show publisher information As a Premium user you get access to the detailed source references and background information about this statistic. Register in seconds and access exclusive features. April 23, 2022 Bild von Sergei Tokmakov Terms.Lawauf Pixabay KPMG Netherland increased their recommended ERP as of 31 March 2022 by 50 bps to 5.5% compared to the fourth quarter of 2021. Financial market overview of the Middle East, Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Profit from additional features with an Employee Account. Could it finally subside in 2023? He was a Quantitative Trading & DevOps Intern at Bincentive, a crypto asset management firm in Taiwan. G}R|K/Q Q84UUA.Zy/s#['L cw5(Jj5XGhcAi"7&-,?8[[. With the KPMG Valuation Data Source, you can calculate both types of WACC. Still unsure? A confirmation email has been sent to you. As a result, the return on equity allowance set by the QCA has moved in lock-step with changes in government bond yields and has fallen materially since 2014 to historical lows as the QCA's estimate of the risk-free rate has declined. 0000001580 00000 n Yet despite recent rate increases, the impact has yet to prompt major waves in unemployment. The tool provides access to cost of capital parameters from more than 150 countries and peer group-specific data from over 13,500 companies worldwide. Instead, manufacturers are saying they are confident conditions will improve in the second half of the year. Risk Vs. The QCA's allowed return on equity for every business To use individual functions (e.g., mark statistics as favourites, set These risk premiums are estimated based upon a simple 2-stage Augmented Dividend discount model and reflect the risk premium which would justify they current level of the index, given the cash yield, expected growth in earnings and the level of the long term bond rate. All rights reserved. The cut-off dates range from 2011 to the present. Financial market overview of the Middle East, Facebook: quarterly number of MAU (monthly active users) worldwide 2008-2022, Quarterly smartphone market share worldwide by vendor 2009-2022, Number of apps available in leading app stores Q3 2022, Profit from additional features with an Employee Account. The best of the best: the portal for top lists & rankings: Strategy and business building for the data-driven economy: Industry-specific and extensively researched technical data (partially from exclusive partnerships). 53 companies listed on the Main Market in 2021, the most in any year since 2017. ", Social Science Research Network, Average market risk premium in the United States from 2011 to 2022 Statista, https://www.statista.com/statistics/664840/average-market-risk-premium-usa/ (last visited March 05, 2023), Average market risk premium in the United States from 2011 to 2022 [Graph], Social Science Research Network, May 23, 2022. Expert provider of complex administrative solutions for capital events globally. Subscribe here to get every update, including when new charts or infographics go live: Visualizing the 200-Year History of U.S. Interest Rates, The Pyramid of Equity Returns: Almost 200 Years of U.S. Stock Performance, All S&P 500 Sectors and Industries, by Size, Visualizing the History of U.S. Inflation Over 100 Years, The Top Investment Quotes Every Investor Should Know, Visualizing the Hierarchy of Financial Needs, Asset Class Risk and Return Over the Last Decade (2010-2019), Mapped: The Growth in U.S. House Prices by State. ", Social Science Research Network, Average market risk premium in selected countries worldwide in 2022 Statista, https://www.statista.com/statistics/664734/average-market-risk-premium-selected-countries/ (last visited March 05, 2023), Average market risk premium in selected countries worldwide in 2022 [Graph], Social Science Research Network, May 23, 2022. "Average Market Risk Premium in Selected Countries Worldwide in 2022. Are you interested in testing our business solutions? W.(?Q3|3sv J@?Erv=^FD8_r"m5%R tp@" zI c]j=3j.#DQK[rlEPF#=]Rs#cAGEZN9;Np)#s A total of 108 companies came to market in London in 2021, more than 2020 (38) and 2019 (35) combined. Below, we look at how equity risk premiums break down for 177 countries and regions, organized from highest to lowest. This is the fourth edition of our comparison between IFRS and Dutch GAAP. A multi-skilled professional in financial/data analysis and modelling, financial risk management, auditing and accounting. I am passionate about mathematical and . The App includes documentation for all of these sources. One method is to assume that all companies incorporated in a country have equal exposure to that countrys risk. To account for the additional risk stocks carry over bonds, multiply the credit spread by the relative equity market volatility. In the above infographic, we look to answer that question using the World Economic Outlook report by the International Monetary Fund (IMF). Alternatively, investors can calculate a weighted-average premium based on the location of a companys revenue or production. The average market risk premium in the United States increased slightly to 5.6 percent in 2022. The KPMG Valuation Data Source does not select the appropriate settings for you, but provides extensive documentation about the different beta types which will facilitate your decision. Kroll is a leading provider of goodwill, intangible and long-lived asset impairment testing. Use Ask Statista Research Service, finance and economics professors, analysts and managers, According to the source, the report is presenting required market risk premium (or equity premium) defined as: "incremental return of a diversified portfolio (the market) over the risk-free rate required by an investor. In, Social Science Research Network. Heres a hypothetical example for an oil & gas company that has reserves in the United States, Saudi Arabia, and Venezuela: The weighted-average equity risk premium is 14.41%. The U.S. is forecast to see an unemployment rate of 4.6%, or 1.2% higher than current levels.