This cost of equity calculator requires the following information: Next year’s dividends per share, current mark value of stock, and grow rate of dividends. Enter this information into the form below to calculator the cost of equity.

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## Cost of Equity Formula

The following formula can be used to calculate cost of equity.

Cost of Equity = (Next Year’s dividends per share / Current market value of stock) + Growth rate of dividends

How to calculate cost of equity

**First, determine the current stock value**Look up the current stock value of the security you are analyzing.

**Next, estimate next year’s dividends per share**Based on the current stock price and % dividends, calculate next years dividends per share.

**Determine the growth rate of the dividend.**Calculate the growth rate of the dividends using next years value and the past years value.

**Calculate the cost of equity**Enter the information from steps 1-3 into the equation to calculate the cost of equity.

## FAQ

**What is the cost of equity?**

The cost of equity is a financial term used to describe the growth rate of dividends with respect to the current stock price. In other words the net cost of the stock at the current moment.

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