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Match the Term with Its Definition

question 4

Multiple Choice

Match the term with its definition.
-Money loaned for a 5- to 10-year term, corresponding to the length of time the investment will bring in profits


Definitions:

Cost of Preferred

This refers to the required return on investment for preferred stock, representing the cost to a company for issuing such stock.

Pretax Cost of Debt

The interest rate a company pays on its debts, before taking taxes into account.

Cost of Equity

This refers to the rate of return that a company is expected to offer investors to compensate for the risk of investing in its equity.

Beta

A measure of a security's volatility in relation to the overall market.

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