Cost of retained earnings

Cost of Capital
Knowledge Center

 
Cost of Capital > Forum

New Topic


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. (...) Read more? Sign up for free

  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...

 

More on Cost of Capital
Summary
Forum
Analysis of Capital Investments
Cost of retained earnings
How Inflation Affects Cost of Capital and Profitability
Cost of Capital ( Equity Only)
🔥What is the Difference Between Cost of Capital and Weighted Average Cost of Capital?
Special Interest Group

Are you interested in Cost of Capital? Sign up for free

Notify your students

Copy this into your study materials:

and add a hyperlink to:

Link to this discussion

Copy this HTML code to your web site:


Cost of Capital
Knowledge Center

 


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2021 12manage - The Executive Fast Track. V15.7 - Last updated: 22-1-2021. All names of their owners.