expected costs of equity capital 2 sbr 58 january 2006 36 holger daske günther gebhardt stefan klein estimating the cost using analysts consensus forecasts abstract in this study we develop a technique for rm s derived from its stock price and earnings our estimation method which is based on residual income valuation model extends re nes currently available approaches by explicitly allowing daily only publicly information at that date apply tech nique to estimate market industry indi vidual level historical german data 1989 2002 examine characteristics have been systematically related these estimated return expec tations jel classi cation g12 g14 g31 m41 keywords analyst premium 1 introduction sound estimates are crucial evaluating investments corpo rate current state art methods such as capm or fama french three factor not
