What is Equity risk premium (ERP)?
The excess return investors demand over the risk-free rate. Damodaran's implied ERP was 4.23% as of January 2026.
Where you will use it: this term comes up in the Entrepreneurial Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Entrepreneurial Finance course by Devon Coombs, CPA, MBA.