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Earning Price Approach

Earning Price Approach:

Cost of equity determines the market price of the shares. It is based on the future earning prospects of the equity. The formula for calculating the cost of equity according to this approach is as follows.

Ke = E / Np

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Ke = Cost of equity capital

E = Earning per share

Np = Net proceeds of an equity share

Earning Price Approach Earning Price Approach Reviewed by Ikpokolo Francis on Saturday, April 29, 2017 Rating: 5

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