Malaysia’s Equity Risk Premium Gets a Boost: December 2022 Update

The equity risk premium (ERP) reflects the investors’ expectation about the risk in a market and how much to price the risk associated with the general market.

Under the Capital Asset Pricing Model (CAPM), ERP plays an influential role in estimating the cost of equity. It measures how much return an investor can expect from shares compared to a risk-free investment.

Investors can make better and more informed investment decisions if they understand how ERP prices their investments through the cost of capital and discount rates.

Download our latest insights on the ERP below