Year-end 2018 equity risk premia and size premia are now available in BVR’s Cost of Capital Professional platform. In addition, several new enhancements have been made to the platform. They include:

• Beta-adjusted size premia (a new paper says that using beta-adjusted size premia may be important to prevent overstating risk);
• Excel download of user-selected variables and calculations, including citations of all sources used;
• Ability to compute the weighted average cost of capital (WACC); and
• Ability to choose geometric mean returns or arithmetic mean returns.

In terms of the ERP, you can enter your own values if you wish, and there is an accompanying field to enter notes that support your selection. As for the size premium, you may be asking: How is firm size measured? The Cost of Capital Professional platform presents return data across firm sizes with size measured as market value of equity (market capitalization). This measure is very likely the most common measure of firm size in academic research on the cross-section of equity returns. Using the market value of equity for firm size is market-oriented and captures forward-looking expectations of market participants.