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Cost of Equity Formula

Prepare a PowerPoint presentation on a given topic in the field of International Finance for the Finance for International Business course. The presentation should be delivered in a seminar and submitted electronically on StudyNet. Each team is required to present one topic and there will be two teams presenting in each seminar.

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Added on  2022-08-22

Cost of Equity Formula

Prepare a PowerPoint presentation on a given topic in the field of International Finance for the Finance for International Business course. The presentation should be delivered in a seminar and submitted electronically on StudyNet. Each team is required to present one topic and there will be two teams presenting in each seminar.

   Added on 2022-08-22

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Estimating
Capital
Costs
Cost of Equity                      Formula_1
Cost of Capital
It is the cost of the firm’s funds weather it is debt and
equity.
This cost of capital also states the opportunity cost of
making a specific investment.
It also helps to estimate the rate of return which is
earned by investing the same amount of money on
different investment areas (Pant, 2019).
Cost of Equity                      Formula_2
Estimation of Capital Cost
The cost of capital has been evaluated with the
formula of:
Cost of Capital= Cost of Debt + Cost of
Equity
Cost of Debt= Interest Expenses x (1- Tax Rate)
Cost of Equity= Risk-Free Rate of Return +
Beta * (Market Rate of Return - Risk-Free Rate
of Return)
(Wallstreet Mojo, 2019).
Cost of Equity                      Formula_3

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