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Adjusting the Cost of Equity for a Private Firm
  • Adjusting the Cost of Equity for a Private Firm
  • Adjusting the Cost of Equity for a Private Firm
Originally published: 12/07/2016 10:54
Publication number: ELQ-50199-1
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Adjusting the Cost of Equity for a Private Firm

This model can be used to adjust equity costs for firms

Prof. Aswath Damodaranby Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 1,092
NYU Stern School of Businesswith NYU Stern School of Business
An Education in PossibleFollow 62
7 reviews318 views|Start the discussion!|Bookmark download for free
financeequityadjustmentprivate firm
Description
The user must input the following variables:
- Equity
- Debt
- Debt Ratio

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School

This Best Practice includes
1 Excel Model

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Further information

Outputs:
- Debt to capital ratio for private firm
- Total beta for firm
- Weight in Cost of Capital
- Cost of Component


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