Contour plowing. Contour ploughing or contour farming is the farming practice of ploughing and/or planting across a slope following its elevation contour lines. These contour lines create a water break which reduces the formation of rills and gullies during times of heavy water run-off; which is a major cause of top soil loss and soil erosion.
The ex-ante cost of equity capital is the core fac-tor in financial decision making such as equity valuation or project evaluation. As the ex-ante cost of equity capital is not observable, the ex-post realized stock return has been utilized as an indirect measure of the ex-ante cost of equity capital.However, the realized stock return has been proven as a noisy proxy for the ex-ante cost of eq-uity (Fama and French, 1997; Elton, 1999).sia-Pacific Journal of Financial Studies (2008) v37 n4 G  which suggests that the ICOE may reduce the noises in the ex-post stock returns as a proxy for the ex-ante cost of equity capital. Table 2 also reports the correlations among risk proxies.
The firmâs overall cost of capital is based on the weighted average of these costs. For example, consider an enterprise with a capital structure consisting of 70% equity and 30% debt; its cost of equity is 10% and after-tax cost of debt is 7%.Therefore, its WACC would be (0.7 x 10%) + (0.3 x 7%) = 9.1%.ince the cost of capital represents a hurdle rate that a company must overcome before it can generate value, it is extensively used in the capital budgeting process to determine whether the company should proceed with a project.