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The document outlines the information needed to calculate a firm's cost of equity (KE), including equity options, debt options, the Capital Asset Pricing Model (CAPM), share types, and the Dividend Growth Model. It provides the inputs for the CAPM calculation: the treasury bill rate is 5%, the market rate of return is 15%, the beta factor is 1.2, and the risk factor is 1.2. Using these inputs, the firm needs to calculate its KE.

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Suren Theannilawu
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56 views

Assignment Information

The document outlines the information needed to calculate a firm's cost of equity (KE), including equity options, debt options, the Capital Asset Pricing Model (CAPM), share types, and the Dividend Growth Model. It provides the inputs for the CAPM calculation: the treasury bill rate is 5%, the market rate of return is 15%, the beta factor is 1.2, and the risk factor is 1.2. Using these inputs, the firm needs to calculate its KE.

Uploaded by

Suren Theannilawu
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Need to include in the assignment

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Equity option
Debt option
CAPM
Ordinary shares
Preference Shares
Dividend Growth Model

A firm needs to calculate the cost of equity by following the below information
1.
2.
3.
4.

Treasury bill rate of the country is 5% per annum


The market rate of return is 15%
And the beta factor is 1.2
Risk factor is 1.2

Calculate the KE of the firm.

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