ValueTrust has released an eighth edition (dated June 30, 2021) of its “European Capital Market Study” that serves as a comprehensive compilation of capital market parameters such as cost of capital and implied as well as historical risk premiums for European countries. The study also includes trading multiples and total shareholder returns across a wide range of industries. Here are a few key findings:

• The risk-free rate in Europe increased from -0.14% as of Dec. 31, 2020, to 0.33% as of June 30, 2021;
• The implied market return is at 7.4% as of June 30, 2021, so, taking the risk-free rate of 0.33% into account, the implied market risk premium is 7.1%; and
• The implied sector return (unlevered) of the energy sector increased from 4.0% as of Dec. 31, 2020, to 5.6% as of June 30, 2021, which is the largest increase compared with the other sectors.

The full report is available if you click here.