The Market Risk Premium (MRP) is the additional return that investors expect to earn from investing in a risky equity portfolio (such as the Nifty 50) over and above the risk-free rate (typically the 10-year Government of India bond yield). It compensates investors for taking on the inherent uncertainty of equity markets. MRP is a critical input in the Capital Asset Pricing Model (CAPM) and discounted cash flow (DCF) valuations. Historically, the equity risk premium in India has ranged between 4% and 7% over long periods.
For android only
