Is the inverse of a firms P/E ratio a reasonable proxy for its equity cost of capital?

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Is the inverse of a firm’s P/E ratio a reasonable proxy for its equity cost of capital?

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International Corporate Finance Value Creation With Currency Derivatives In Global Capital Markets

ISBN: 9781119550464

2nd Edition

Authors: Laurent L. Jacque

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Question Posted: Mar 09, 2024 01:02 AM

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Is the inverse of a firms P/E ratio a reasonable proxy for its equity cost of capital?

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The inverse of a firms PricetoEarnings PE ratio also known as the Earnings Yield can be used as a rough estimate or proxy for its equity cost of capit...View the full answer

International Corporate Finance Value Creation With Currency Derivatives In Global Capital Markets

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