Cost of Equity = 2% + 1.5 × (8% – 2%) = 2% + 9% = 11% In this example, the cost of equity is 11%, meaning investors expect an 11% return on their investment to compensate for the risk ...

Again, to make sure you're comparing apples to apples, use the shareholders' equity for the same period as your net earnings calculation. If you're using multiple quarterly reports, take the ...

Average shareholder equity is calculated using equity figures from multiple periods. This measurement is crucial for a more accurate assessment of company performance over time. Using average ...