Skip to content
Sign inRegister

Ask the Tutor ACCA AFM

CAPM

AAMAAL5y ago
Hello ... I would like to know that the cost of equity that is found using CAPM method/formula is that geared cost of equity or ungeared...
John MoffatJohn MoffatTutor5y ago#1
The equity beta is always used for calculating the cost of equity. The more gearing there is in the company then the higher the equity beta will be and therefore the higher the cost of equity will be. You really need to watch my free lectures on CAPM.
Sign into reply to this topic.