Cost of Equity Capital Using the Dividend Discount Model Approach – Excel Template

Ivan Kitov
Ivan Kitov

The Dividend Discount Model (DDM) allows for calculating the cost of equity capital. It estimates the cost of common equity by summing the next period dividend yield and the dividend growth rate. In practice, this can be used as an alternative to the CAPM.

Some other related topics you might be interested to explore are the Bond-yield-plus-risk-premium approach, Capital Asset Pricing Model, and Cost of Equity.

This is an open-access Excel template in XLSX format that will be useful for anyone who wants to work as a Banker, Investment Professional, Corporate Finance Practitioner, or Portfolio Manager.

You can now download the Excel template for free.

Cost of equity capital is among the topics included in the Corporate Finance module of the CFA Level 1 Curriculum.

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