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Understanding the subject with approaches to calculate cost of equity K assignment help:
To float any company in the market, it needs investors and shareholders. Given the rapid fluctuations of the market, the company has to pay a few charges to the shareholders as compensation for the risk they take in investing in the company. This amount includes the brokerage fee as well.
Now, if you’re the investor, the cost is equity is your expected return for equity shares. But for the company, it is a cost which will help in maintaining the present market price of equity shares. This means that the expectation of the shareholders goes into the determination of equity costs.
Thus the calculation can be a little tricky for there’s no “explicit