Aswath Damodaran flags rise in global risk premiums after U.S. treasury downgrade

Aswath Damodaran warns that global equity risk premiums are rising due to the U.S. sovereign debt downgrade, prompting a reassessment of the traditional risk-free benchmark used in valuation models. For India, he pegs the equity risk premium at 7.46% after adjusting for country-specific risks, urging analysts to carefully align inflation expectations in valuations, especially in high-inflation economies.