The Cost of Equity is the return that a company requires to decide if an investment meets capital return requirements. The cost of equity is one of the three components of the WACC (weighted average cost of capital). This blog will look at how to estimate the cost of equity using pre tax and after tax cash flows. It will also look at how to use beta to estimate the cost of equity.If you are the typical entrepreneur then you are probably itching to start the next big thing. One question that you need to ask yourself is whether it is a good idea to invest your capital in an existing business. In this blog we will take a look at the two main sources of capital along with their risks.Most entrepreneurs and investors overlook the cost of equity in their financial projections. They might be missing out on a significant part of the investment returns they think they are going to get. This blog will help you understand how you can include the cost of equity in your financial projections.
