The real cost of debt is equal to interest paid minus any tax deductions on interest paid. The most common method used to calculate cost of equity is the capital asset pricing model or CAPM.

The CAPM formula is: Cost of Equity = Risk-Free ... including both equity and debt financing. Essentially, it represents the company's weighted average cost of raising funds and is often used ...

The real cost of debt is equal to interest paid minus any tax deductions on interest paid. The most common method used to calculate cost of equity is the capital asset pricing model or CAPM.