Cost of equity股本成本,公司权益方要求的回报率
F the investment is financed by euity or equity+debt, it is imperative重要 to designate划定 cost of equity.
However, such cost of equity is a rather subjective issue and depends on the investor, timing, investment etc.
Usually, the opportunity cost (as set by the returns of alternative investment另类投资 products) is taken as a proxy代理. However, this is not a correct approach since it does not take into account risk issues.
As a rule of thumb, cost of equity may be taken as 2*cost of mid-long term bank loans.