The company's cost of equity is % of retained earnings according to the capm.
The cost of equity for a corporation is the amount that the market is willing to pay to own an asset and take on ownership risk. The two common methods for determining the cost of equity are the capital asset pricing model and dividend capitalization model. On the right side of the balance sheet, you can see a list of the company's debt and equity accounts. The cost of capital refers to the price a business must pay to finance its operations through debt, equity, or a mix of the two.
b = rs = rRF + b(RPM), and rRF + b(RPM) =
% RPM
% were lent to us.
Learn more about cost of equity here
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