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Lesson 71 E2a

Cost of equity

You'll learn what cost of equity is and why it matters to company valuation. This video introduces the three main models used to estimate cost of equity—the dividend valuation model, dividend growth model, and capital asset pricing model (CAPM)—so you can determine the returns shareholders expect from their

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In this lesson

  1. 0:00 Cost of equity introduction
  2. 0:07 What cost of equity represents
  3. 0:27 Three models for estimating cost of equity

About this lesson

investment. Understanding cost of equity is essential for financial analysis across FM, AFM, and SBR papers, and forms the foundation for calculating WACC and making investment decisions. By the end, you'll be able to distinguish between these approaches and apply them to real exam scenarios.

Duration: 1m

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