Using the CAPM method, what is the cost of common equity if Krf = 6%, RPm = 5%, and the firm's beta is 1.2? if Do = $3.75, Po = $40, and g = 6%, using the DCF method, what is the cost of common equity?© BrainMass Inc. brainmass.com June 3, 2020, 6:20 pm ad1c9bdddf
In the CAPM method, the formula for calculating the cost of equity Ke is
Ke = Risk Free Rate + Risk Premium X ...
The solution explains the calculation of cost of common equity using the CAPM method and the DCF method