Stock risk premium calculator
The equity risk premium is calculated as the difference between the estimated real return on stocks and the estimated real return on safe bonds—that is, by subtracting the risk-free return from the Equity risk premium is the difference between returns on equity/individual stock and the risk-free rate of return. It is the compensation to the investor for taking a higher level of risk and investing in equity rather than risk-free securities. Corporate Finance Institute . Equity risk premium refers to the excess return that investing in the stock market provides over a risk-free rate. This excess return compensates investors for taking on the relatively higher risk