Cost of retained earnings

      
			              Forum
			            
			            New Topic

			            	shraddha
			            
Cost of retained earnings

	          		My question is how to calculate cost of capital in case a company has its funds only through equity shares & its reserves?

Then how to calculate cost of retained earnings (reserves). As it is a major constituent of company's long term funds.
				      
X

							  			Welcome to the Cost of Capital forum. The topic being discussed here is: "Cost of retained earnings". 
										
Please sign up now to read all responses and to join this discussion yourself. It's free.

										Log in

						            	bhavik
												
				                Reply to Question Regarding Retained Earnings

														The retained earnings can be calculated as follows:

K'E(i.e. Cost of retained earnings) = KE * (1 - F)

Where KE = Cost of Equity, F = Flotation cost

In case flotation cost is not given you may take KE = K'E

Suggestions welcomed...
				                
Leave a comment. More info. 

Start a new forum topic

			                            More on Cost of Capital:
			                          
													            	Summary
													            
		                              Special Interest Group
		                            
		                            Do you have a keen interest in Cost of Capital? Become our SIG Leader

Cost of Capital
Knowledge Center

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2021 12manage - The Executive Fast Track. V15.8 - Last updated: 17-10-2021. All names ™ of their owners.