Cost of equity, abbreviated as COE, is the rate of return a company expects on their equity inestments to compensation for the risk profile of the asset.
Cost of Equity Formula |
| \( COE \;=\; \dfrac{ DPS }{ CMV } + GRD \) |
| Symbol |
| \( COE \) = cost of equity |
| \( CMV \) = current market value of stock |
| \( DPS \) = dividends per share, for next year |
| \( GRD \) = growth rate of dividend |
