Weekly Country Risk Premia

Country risk premium captures the additional return investors require to hold equities in a country relative to a mature, low-default-risk market. It is the bridge between a global cost of equity and a country-specific one. The standard formula multiplies a country's sovereign default spread by the equity-to-bond volatility ratio — high default risk combined with thin, volatile equity markets produces a higher premium. Equity risk premium adds the mature-market base (4.23%) to that figure; cost of equity, cost of debt, and ultimately WACC then propagate from those two.

The published reference dataset uses inputs as of one annual snapshot. Tidore re-runs the same methodology weekly against the current sovereign default spread, the current twelve-month equity-index volatility, and the current twelve-month bond volatility. The two numbers usually agree closely for stable countries and drift further apart for distressed sovereigns where input volatility is itself volatile. We do not claim the weekly figure is more accurate — only more current. The static reference remains the canonical anchor; the weekly recompute shows where the inputs have moved since.