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Finance 18 Online
OpenStudy (anonymous):

is cost of equity be negative?? when i try to find market premuim durin 2002 to 2006, i got market return as -31% and risk free yield as 7%. Hence mt cost of equity is 7%+0.97*(-31%-7%)=-30% is it right way of calculation? Please clarify

OpenStudy (anonymous):

please help. Medal is awarded for the answer

OpenStudy (lena772):

In accounting and finance, equity is the residual value or interest of the most junior class of investors in assets, after all liabilities are paid; if liability exceeds assets, negative equity exists.

OpenStudy (lena772):

So if your calculations are correct, -30% is certainly an answer. :)

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