Country risk premium for MNC
Description
Multinational companies operate on several markets. But nobody knows which approach for shares' return estimation should be chosen be investors. The key question is: does country risk premium matter in shares' return calculation or not? The data which contains in this dataset, relates to 70 companies, 41 ones are incorporated in developed countries, 29 ones - in developing countries. The sample is representative as we include all major economic sectors like oil and gas, metal and mining, services, manufacture, electronics etc. (analysis carried out by sectors was included at the end of the dataset) and a long period of time (2010-2019). The data was get from different sources: daily shares' and indexes' prices were taken from open sources (Yahoo finance, Investing), country risk premium was taken from Aswath Damodaran's web-site, weights for country risk premium estimation were determined based on data on each company's revenue / fixed assets structure which were taken form each company's annual report (2018-2019). The key hypothesis for this research was: In some cases it is necessary to adjust the estimation of multinational company's cost of equity for country risk in order to get more accurate result. The research showed that contrary to expectations, use of more complicated models does not make the outcome of calculations much more accurate. The exception are developing markets: when an investor intends to invest money in shares of a multinational company which is incorporated in developing countries, he should use more complicated approaches which take into account weighted country risk premium as they help to get more accurate outcomes. All the calculations are included in this dataset.