How to Calculate Cost of Equity by using the CAPM model (Capital Asset Pricing Model)

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WACC has two sides to its formula, Cost of Equity and Cost of Debt. The best way to calculate the Cost of Equity is the CAPM model or Capital Asset Pricing Model.

CAPM model includes the risk-free rate, beta, and market risk premium. In this video, we will explain how to calculate the Cost of Equity which is the expected return for investors.

This is the 6th of 11 videos that teach Business Finance in Section 6 and is a good starting point if you are new to Finance or need a refresher.

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#businesseducation #corporatefinance #CAPM #costofequity
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you are teaching me more in 2 videos than my professor did this entire semester

katyb
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Great content, clear and concise. Not sure why you don't have way more subscribers. Thanks for what you do.

sharr
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you didn't explain the market risk premium

abdelrahmanibrahim