All about Cost of Capital
Learn from colleagues and experts
Join now. Now 30 days for free.
Log in
X
Why register?
Welcome to the world's #1 website about management.
- Discover 1000s of knowledge centers.
- Learn from colleagues and experts.
- Share best practices with 1,000,000 members.
- Accelerate your management career.
- Now 30 days for free.
Log in
|
Cost of retained earnings
shraddha, India
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 Earningsbhavik, Student (MBA), India 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
|
|
|
More on Cost of Capital
|
|
|
|
|
|
|
|
