There Are Two Types of Comparisons: _______________ and Figurative

question 20

Short Answer

There are two types of comparisons: _______________ and figurative.

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Definitions:

Component Cost Of Equity

The rate of return that a company must offer investors to encourage investment in its equity, accounting for risk.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project by discounting future cash flows to their present value.

Cost Of Capital

The rate of return a company must earn on its investment to maintain its market value and attract funds. It represents the cost of a company to secure funds, whether through debt or equity.

Capital Component

One of three sources of capital: debt, preferred stock, or equity.