what is cost of common equity
Cost of Equity. Cost of equity (also known as cost of common stock) is the minimum rate of return which a company must generate in order to convince investors to invest in the company's common stock at its current market price.It is alternatively referred to as required rate of return.ost of equity is an important input in common stock valuation under different models. Cost of equity is estimated using either the dividend discount model or the capital asset pricing model.