Computing Cost of Capital With CAPM . The cost of equity capital, as determined by the CAPM method, is equal to the risk-free rate plus the market risk premium multiplied by the beta value of the ...

The cost of equity helps to assign value to an equity investment. Cost of equity measures an asset's theoretical return to ensure that it's commensurate with the risk of investing capital.

After-tax weighted average cost of capital: The same calculation method as detailed earlier but with the cost of debt modified to reflect the company's tax rate (since interest can be deducted).

Don’t let the availability of capital, or the lack thereof, make you forget to consider its true cost. Whether capital comes from your own savings, a bank or an investor, it comes at a price.

What Is A Zero Cost Of Capital? Normally, publicly traded businesses are subject to a significant price to raise capital to fund their growth. If you borrow money, ...