Definition Equity Cost Of Capital
In other words it is an assessment of the risk of a company s.
Definition equity cost of capital. It is commonly computed using the capital asset pricing model formula. Cost of equity risk free rate of return premium expected for risk. The cost of equity refers to the financial returns investors who invest in the company expect to see. The cost of equity is the return that investors expect from a security as reimbursement for the risk they undertake by investing in the particular security.
The cost of capital refers to what a corporation has to pay so that it can raise new money. What does cost of equity mean. Firms often use it as a capital budgeting threshold for the required rate of. Cost of equity risk free rate of return beta market rate of return risk free rate of return where beta sensitivity to movements in the relevant market.