Survey reveals companies in Europe demand higher market risk premiums than US.
The survey found that analysts and companies in the US, Canada, Europe, and the UK use different market risk premiums (MRP) in their financial analyses. Companies in Europe and the UK tend to use higher MRPs than those in the US and Canada. The range of MRPs used by analysts and companies was smaller than that of professors. Most surveys focus on Expected MRP, but this one looked at Required MRP. The survey also explored the references used to justify MRPs and included comments from respondents on their interpretations of Required MRP.