When a Company Recoups Its Original Investment, the Company Has

question 87

Multiple Choice

When a company recoups its original investment, the company has received a

• A)return on investment.
• B)return of investment.
• C)return of contribution.
• D)hurdle rate.

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Definitions:

Plowback Ratio

The proportion of earnings retained by a company after dividends are paid, often used for reinvestment in the business or to pay down debt.

P/E Ratio

Price-to-Earnings Ratio, a valuation metric that compares a company's stock price to its per-share earnings.

Capital Asset Pricing Model (CAPM)

A model used to determine the theoretical expected return of an investment given its risk, by relating the risk of an asset to its expected return through beta.

Underpriced Stock

A stock that is selling for less than its presumed intrinsic value, suggesting it may be a good buying opportunity.