Question

I'm evaluating a land surveying and mapping company - private company. I met a difficulty in finding beta of this sector. Who knows beta of this sector, please show me! If I can't find appropriate beta, could you show me how to calculate cost of equity.

Answer 1

if you don't find any listed company of land surveying and mapping company, you can come out from it's core sector and find sector close to it. you can take a sector beta of construction company from reuters website.

Formula for cost of equity is:
Rf+Beta*(Rm-Rf)
Rf: risk free rate (10 year govt. bond rate)
Beta: sector beta
Rm: CAGR of stock market return of last 10 year
Rm-Rf also known as Risk Premium