aswathdamodaran.blogspot.com · 2019-08-13
· 2487d
Country Risk: A Mid-year 2019 Update
This article examines country risk across multiple dimensions—life cycle, political risk (corruption and violence), legal protections, and economic structure—and presents composite measures including country risk scores, sovereign ratings, CDS spreads, and equity risk premiums. The author argues that companies and investors must incorporate country-specific risk into capital allocation and hurdle rate decisions, particularly for multinational operations and cross-border investments.
Metrics in this report
Country Risk Score
80-100points
low-risk threshold
PRS Group country risk assessment; scores from 0-100 with higher indicating lower risk
Implied Equity Risk Premium
5.67%percent
base
S&P 500 as of July 1, 2019; used as base for calculating country-specific equity risk premiums