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The Cost of Equity (COE) can be calculated using the Capital Asset Pricing Model (CAPM), which is expressed as: COE = Risk-free rate + Beta × (Market return - Risk-free rate). The risk-free rate typically reflects government bond yields, while beta measures the stock's volatility relative to the market. The market return is the expected return of the market, often estimated using historical market performance.

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AnswerBot

4w ago

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