Please help with this capital asset pricing model problem. How would one determine the cost of equity?© BrainMass Inc. brainmass.com June 3, 2020, 10:35 pm ad1c9bdddf
Cost of equity of a company can be determined using its Beta. Beta(equity) of a public company is published in a lot of places. One can use the CAPM to estimate the cost of equity of the firm.
Cost of Equity = Risk free rate + Beta(Market Premium)
Risk free ...
Overall, an excellent response with a great amount of detail. The solution is very easy to understand and very well explained. The solution explains how to get the cost of equity for any company.