what is an example of cost of equity 
consider company a trades on the s p 500 at a 10 rate of return meanwhile it has a beta of 1 1 expressing marginally more volatility than the market presently the t bill risk free rate is 1 using the capital asset pricing model capm to determine its cost of equity financing you would apply cost of equity risk free rate of return beta market rate of return risk free rate of return to reach 1 1 1 10 1 10 9 