The Return That Shareholders Require on Their Investment in the fiRm

question 98

Multiple Choice

The return that shareholders require on their investment in the firm is called the:

• A) Dividend yield.
• B) Cost of equity.
• C) Capital gains yield.
• D) Cost of capital.
• E) Income return.

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Definitions:

Additional Interest

Interest that accrues in addition to the regular interest, often due to late payments or changes to agreed terms.

Borrow

The act of obtaining or receiving something with the intention of returning it or its equivalent.

Pay Back

A financial metric used to evaluate the time required to recoup the cost of an investment, gauging its profitability.

Directed Effort

Focused work or activities aimed at achieving a specific goal or objective.