Determination of equity risk premium in project investment analysis

Today one of the main problems in the evaluation of the investment attractiveness and efficiency ofprojects is the determination of the cost of equity. Traditionally, cost of equity is calculated using the Capital Assets Pricing Model (CAPM). In the article, one of the main components of the model - the Equity Risk Premium (ERP) is considered. The analysis of available information and practices revealed that it is impossible to objectively assess the value of the equity capital for Russian investors based on the available data of international analysts and on the commonly acceptable methods. Sanction pressure and asset freezes have led to the fact that today the risks for shareholders depend not only on the object of valuation (business, project), but also on the characteristics of the investors. The article presents summary data from various sources on the level of equity risk premium, academic and alternative approaches to calculating equity risk premium and cost of equity.