The Study of an Individual Item or Account Over Several

question 86

Multiple Choice

The study of an individual item or account over several periods in the same financial year or over many years is known as:

• A)Liquidity analysis
• B)Ratio analysis
• C)Vertical analysis
• D)Horizontal analysis

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Definitions:

Cost of Equity

The return that investors expect for their investment in a company's equity, representing the compensation for the risk taken.

Market Risk Premium

The excess return that investors require from an investment in the stock market over a risk-free rate. This premium compensates investors for taking on the higher risk of investing in stocks.

Risk-Free Rate

The theoretical rate of return on investment with zero risk of financial loss, often represented by government bonds.

Expected Dividend

The dividend payment a shareholder anticipates receiving, based on the company's past dividend history or announcements.