Determining the cost of equity is one of the most difficult problems in corporate finance. In this paper, we present a simple estimation example using an internet start-up company. We use public firm comparables for beta, making adjustments for leverage using Harris and Pringle’s (1985)...

Michael Powers licensed a series of domain names that he thought would allow him to create a profitable set of online tourism marketing sites. The case asks students to evaluate the feasibility of the business, given Michael’s projections. Given what they find, students are then asked to...