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What Is the Cost of Equity Formula?Each formula serves a different purpose, with CAPM being the more widely used method for publicly traded companies and DDM focusing on dividend-paying stocks. Capital Asset Pricing Model (CAPM ...
One common formula used to calculate the cost of equity is the capital asset pricing model (CAPM). The CAPM formula is: Cost of Equity = Risk-Free Rate + (Beta * Market Risk Premium) Several ...
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