How to Calculate Cost of Equity using CAPM

>> YOUR LINK HERE: ___ http://youtube.com/watch?v=JyUBm9M7Wyw

This video shows how to calculate a company's cost of equity by using the Capital Asset Pricing Model (CAPM). • You can calculate the cost of equity for a company by using the following formula: • Cost of Equity = Risk-free Rate + Beta * (Expected Market Return - Risk-free Rate) • For example, let's say the risk-free rate is 2% and the expected market return is 10%. If a company's beta is 2.5, its cost of equity would be 22%. This cost of equity is the required rate of return that investors would expect to receive based on the company's systematic risk. If the systematic risk were higher (for example, a company with a beta of 3.0), then the cost of equity would be higher (26%) because investors would expect a higher return to compensate for bearing a higher level of systematic risk.— • Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world. • — • SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS: • • A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING • • A 44-PAGE GUIDE TO U.S. TAXATION • • A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS • • MANY MORE FREE PDF GUIDES AND SPREADSHEETS • http://eepurl.com/dIaa5z • — • SUPPORT EDSPIRA ON PATREON • * / prof_mclaughlin • — • GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT • https://edspira.thinkific.com • — • LISTEN TO THE SCHEME PODCAST • Apple Podcasts: https://podcasts.apple.com/us/podcast... • Spotify: https://open.spotify.com/show/4WaNTqV... • Website: https://www.edspira.com/podcast-2/ • — • GET TAX TIPS ON TIKTOK • / prof_mclaughlin • — • ACCESS INDEX OF VIDEOS • https://www.edspira.com/index • — • CONNECT WITH EDSPIRA • Facebook: / edspira • Instagram: / edspiradotcom • LinkedIn: / edspira • — • CONNECT WITH MICHAEL • Twitter: / prof_mclaughlin • LinkedIn: / prof-michael-mclaughlin • — • ABOUT EDSPIRA AND ITS CREATOR • https://www.edspira.com/about/ • https://michaelmclaughlin.com

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