This paper examines the relationship between dividend-based and earnings-based cost of equity capital estimates under temporary competitive advantage. A new insight is that the true cost of equity is shown to approach the geometric mean of the supernormal dividend-based and simple earnings-based estimates, as the mean period of competitive advantage approaches the supernormal payback period. We proceed to analyse the international shipping sector across 14 countries from 1998 to 2005. Although the mean cost of equity is around 10–11%, there is high variability and non-normality. The cost of equity measures under temporary competitive advantage provide estimates statistically independent of those based on stock market risk.