All other things being equal, the lower a company's cost of equity the higher will be its stock price.

Question

Quizplus · Accepted Answer

When a company's cost of equity is lower, it indicates that it is less expensive for the company to obtain funding through equity. This can lead to higher profits and cash flows, which can in turn increase the company's stock price. Investors may also perceive the company as less risky, leading to an increase in demand for its shares and a higher stock price.

All Other Things Being Equal, the Lower a Company's Cost