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The price of a computer is $1,000 and the price of a car is $12,000. What is the relative price of a car? What is the relative price of a computer?
Real Risk-free Rate
The theoretical return on an investment with zero risk, taking into account the effects of inflation, thus representing the true purchasing power of the investment return.
Expected Inflation
The anticipated rate at which the general level of prices for goods and services will rise over a period of time.
Dividend-payout Ratio
A financial ratio that shows the percentage of a company's earnings paid to shareholders in the form of dividends, reflecting a company's dividend policy.
Anticipated Growth Rate
The expected rate at which a company, asset, or economy is predicted to grow over a certain period of time.
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