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Dividend Growth Model
A model that estimates the value of a stock based on its expected dividends and their growth rate.
Retained Earnings
The portion of net earnings not paid out as dividends but reinvested in the business or kept as reserve.
Cost of Equity
The return a company theoretically pays to its equity investors, i.e., shareholders, to compensate them for the risk of investing in the stock.
Marginal Cost of Capital
The cost of obtaining an additional dollar of new capital, which increases as more capital is raised due to increasing risk and/or decreasing attractiveness to investors.
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