Cost of Capital

[Name of the Professor]

Cost of Capital

Introduction

The cost of equity can be calculated by using a variety of methods involved. I will be discussing the three most widely methods for calculating the cost of equity which includes the Capital Asset Pricing Model, Dividend Discount Model and the Arbitrage Pricing Theory Model. All these models have their own advantages and disadvantages in terms of applicability and usage and it will be discussed in great depth later. A great deal of emphasis will be given on the cost and risk being associated with each model and how it will fare for the ...