Estimating the cost of equity capital has traditionally been a minefield. Complete agreement still does not exist on the best way of determining this yardstick. This guide tackles such indecision head-on; it shows how to estimate the cost of equity capital from the UK perspective and demonstrates the effects of making different assumptions on the cost estimates. The various techniques reviewed, incorporating a study of 500 UK firms, include: the capital asset pricing model (CAPM) including the frameworks introduced by Fama and French; the arbitrage pricing model; and dividend-valuation models.