Cost of retained earnings

12manage is hiring Management/MBA Students!


 
Cost of Capital > Forum Log in

Cost of retained earnings
shraddha
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.
 

 
Reply to Question Regarding Retained Earnings
bhavik, Member
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...
 

 











 

  Do you wish to study further? You can learn more from the summary, forum, discussions, lessons, courses, training, instructions, expert tips, best practices and education sources. Register.  


Special Interest Group Leader

You here


More on Cost of Capital
Summary
Forum
Best Practices

Expert Tips

Resources



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2018 12manage - The Executive Fast Track. V14.1 - Last updated: 18-6-2018. All names of their owners.