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Cost of Equity Capital: An Example of Evaluation for Selected Slovene Joint-Stock Companies


  • Igor Stubelj

    (University of Primorska, Slovenia)


The article sheds light on the evaluation of cost of equity, which is important as it determines the minimum yield the investors require on the invested capital. We use the cost of equity as a discount rate to calculate the present value of the expected free cash flows which belongs to the owners of equity capital. In the article, the methodological solutions for the evaluation of the equity capital cost with the CAPM on the Slovene financial market are shown. The Slovene capital market is a developing market with a short time line of available historical data. We evaluate the equity capital cost for selected Slovene companies.

Suggested Citation

  • Igor Stubelj, 2009. "Cost of Equity Capital: An Example of Evaluation for Selected Slovene Joint-Stock Companies," Management, University of Primorska, Faculty of Management Koper, vol. 4(1), pages 21-38.
  • Handle: RePEc:mgt:youmng:v:4:y:2009:i:1:p:021-038

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    References listed on IDEAS

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    7. Titman, Sheridan & Trueman, Brett, 1986. "Information quality and the valuation of new issues," Journal of Accounting and Economics, Elsevier, vol. 8(2), pages 159-172, June.
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    9. repec:bla:joares:v:32:y:1994:i::p:65-93 is not listed on IDEAS
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    cost of equity capital; CAPM; yield; risk;


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