Discounted-Cash-Flow-Analysis: Your Complete Guide with Examples
Valutico
OCTOBER 20, 2022
Rf = Risk-free Rate. Rm – Rf) = Equity Market Risk Premium. Cp = Cost of Equity Premium. Tax (from tax rate and EBIT). The details of how the CAPM works is beyond the scope of this article but in short, the formula is as follows: Ce = Rf + B x (Rm – Rf) + Cp. Ce = Cost of Equity. B = Beta. (Rm
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