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Some Politicians Like to Refer to Cases in Which the United

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Some politicians like to refer to cases in which the United States intervened successfully in order to establish democracy; Japan and West Germany after WWII are the favorite examples. However, according to the recent empirical research discussed in Chapter 8 (on democratic transitions), evidence shows that although attempts at the external imposition of democracy may promote some democratic-seeming reforms in the short run, they ultimately produce political instability in the target countries and are unlikely to lead to a stable democracy.

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Risk Projects

Investment initiatives or projects that carry a significant degree of uncertainty or risk regarding their outcomes or potential returns.

Capital Sources

Capital sources refer to the origins of the financial resources that businesses use to fund their operations and growth, including debt and equity.

Average-Risk Projects

Investments that present a level of uncertainty and potential returns that are typical or normal compared to other projects within the same industry.

WACC

An estimated average interest rate a company is expected to pay to all its security holders, reflecting the cost of equity and the cost of debt, weighted according to the proportion of equity and debt in the company's capital structure.

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