Specific model of Cost of Equity:
where
R_f
R_p risk premium
R_p = R_m - R_f, where
R_m is historical average return of the stock market
\beta
K_E = R_f + \beta \cdot R_p
risk-free bond (like for example U.S. Treasury Bond) sensitivity to the market risk for the security
See also
Business / Business Administration / Financial Management / Financial Accounting / Cost of Equity