Cost of capital

Analysis of the ever-changing price of money

Stock prices fell slightly over the last two weeks. The S&P 500 index of big American companies dropped 1.2% to 4,689. But corporate earnings rose. Earnings per share for the index climbed $1.90 to $212.20. Yet the market is a little overvalued. At the current price, it offers an 8.8% expected return, some of the highest expected returns in over a decad…