Unlevered cost of equity

Unlevered cost of equity

The discount rate appropriate for an investment that it is financed with 100% equity.
References in periodicals archive ?
Capital charges for Departments are based on a weighted average of the costs of both debt and equity capital whereas the SOE methodology uses an unlevered cost of equity.
Capital Charging for Departments uses a weighted average of the pre-company tax costs of debt and equity, while the SOE methodology uses an unlevered cost of equity.
In summary, the use of an unlevered cost of equity for SOEs presumes that WACC is independent of leverage, and this rests on three conditions.