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.
We also assume that the pre-tax cost of debt will decline to 7.50%Cost of equity = 4.5% + 0.9(4%+ 5.37%) = 12.93%Cost of capital = 12.93% (0.976) + 7.5% (1-0.33) (0.024) = 12.74%We assume that the stable real growth rate will be 3% and that the firm will have a returnon capital of 15% in stable growth.