[Verse 1] When you invest across the globe today Some countries carry extra risk to weigh Political upheaval, currency swings Emerging markets bring uncertain things Your cost of capital needs to adjust Add a premium you can really trust [Chorus] Country Risk Premium, add it to the rate CRP makes your calculations straight Sovereign spread plus equity adjustment too Political and economic risks coming through CRP, CRP, don't forget to add Country Risk Premium keeps your math on track [Verse 2] Start with the sovereign yield spread as your base Government bonds show the risky case Compare emerging market debt today To safe developed market bond display But equity needs more than sovereign debt A volatility adjustment you won't forget [Chorus] Country Risk Premium, add it to the rate CRP makes your calculations straight Sovereign spread plus equity adjustment too Political and economic risks coming through CRP, CRP, don't forget to add Country Risk Premium keeps your math on track [Bridge] Multiply the spread by sigma ratio Equity vol over bond vol's the way to go Political instability and legal systems weak Currency devaluation makes investors seek Higher returns to compensate the fear Country Risk Premium makes it crystal clear [Verse 3] WACC and CAPM need this extra piece Without CRP your valuations cease To capture all the risks that lie ahead In markets where uncertainty is widespread Add it to your required rate of return Country risk is something you must learn [Chorus] Country Risk Premium, add it to the rate CRP makes your calculations straight Sovereign spread plus equity adjustment too Political and economic risks coming through CRP, CRP, don't forget to add Country Risk Premium keeps your math on track [Outro] Emerging markets, higher required return Country Risk Premium, this is what you learn CRP, CRP, always add the spread Keep your valuations accurate ahead
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