The Rate of Return Used to Value a Business Is

question 21

True/False

The rate of return used to value a business is composed of the basic, risk-free return, an inflation premium, and the risk allowance for investing in the particular business.

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Definitions:

Activity or Transaction

An economic event that involves a transfer or exchange of goods, services, or money between parties.

Environmental Economics

A subfield of economics dealing with the relationship between the economy and the environment, focusing on environmental policies and economic consequences.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be positive or negative.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be used by everyone and one person's use does not reduce availability to others, such as clean air.