Can the cost of equity ever fall below the risk-free rate? Before moving to quickly to answer, what do we do with a company with a negative beta in the Security Market Line (SML)? Do you see a potential conflict with the cost if equity calculation that would come from the Dividend Discount Model (DDM)? From the persoective of project evaluation (e.g., net present value (NPV), can the required return fall below the risk-free rate? Below zero, i.e., negative cost of capital?