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Stock Terminology
1. Finance Midterm Study
| Question | Answer |
|---|---|
| Equity Cost of Capital | The expected rate of return available in the market on other investments with the equivalent risk to the firm's shares. |
| Earnings Per Share | A firm's net income divided by the total number of shares outstanding. |
| Dividend payout rate | The fraction of the firm's earnings that a firm pays as dividends each year. |
| Retention Rate | The fraction of the firm's current earnings that the firm retains. |
| Discounted Cash Flow Analysis | Method for determining a firm's enterprise value by discounting its future free cash flows. |