Customizing Your Industry Risk Premium in Your Build-up Method

The Kroll Company-Level Beta module allows you to identify and select the comparable companies closest to your subject company.  You can then select up to 5 different beta types for each comparable company.  Once you conclude on the levered beta for your peer group, you can convert it into an industry risk premium (IRP), by using the following formula:

IRP   = (Equity Risk Premium * Concluded Beta) – Equity Risk Premium