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M&M Proposition II
A theory proposing that the cost of equity increases as a company increases its leverage, due to the riskier equity stream.
Debt-Equity Ratio
A ratio assessing the comparative financing from equity and debt for a company’s assets.
Cost of Equity
The return a company theoretically pays to its equity investors, conceived as a compensation for taking on the risk of investing.
Break-Even Point
The point at which total revenues equal total expenses, and the business neither makes a profit nor incurs a loss.
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