Definition of cost of equityCost of equity The cost of equity is an opportunity cost. It is the return that shareholders believe they could get elsewhere in similar investments with similar risk. For companies, when they invest shareholders’ money into the business, they need to bear in mind this expectation and ensure that the return on investment meets or beats the opportunity cost of equity. Otherwise, shareholders might reasonably sell their shares and/or decide not to allocate new capital to the company should it want to fund expansion or an acquisition.
Develop your knowledge in your own time and at your own pace with our unique online learning experience. Learn in bite-sized chunks - our short courses include videos, quizzes and plenty of interactivity to keep you interested &Â alert. You can use any device, even your smartphone. Try our demo. If you prefer face-to-face, our virtual workshops are held in small groups and replicate a classroom environment with discussions and interactions via case studies, quizzes, breakout groups and more. Â FinanceTalking LtdA Leading provider in financial training for non-financial people, corporate communications, financial PR and Investor Relations. We've spent years developing practical, interesting, engaging ways for people to learn - and have developed multiple ways to make the learning stick. Most importantly, people leave our courses with the tools in place to use what they have learnt back at work - and make a difference. Our most popular online courses include:
|