Kroll reports continued low eurozone risk-free rates, while US rates rise

BVWire–UKIssue #38-1
May 3, 2022

Kroll continue to update UK cost of capital data at their Cost of Capital Resource Center. Kroll has left unchanged (until further notice) its recommended German normalized risk-free rate of 1.5% and its current eurozone equity risk premium range of 5.5% to 6.0% (from a German investor’s perspective). The U.S. comparables are 3.0% and 5.5%, respectively, driven by US Federal Reserve actions and inflation.

Kroll has published its recommended eurozone ERP and corresponding risk-free rate since 2019. They regularly reassess ERP and risk-free rate assumptions since they are essential inputs to any capital asset pricing model (CAPM) analysis.

Please let us know if you have any comments about this article or enhancements you would like to see.