Question

Cost of equity is a key component of

Options

O stock under valuation

0 stock valuation

0 Cost of debt

O stock over valuation​

Answer 1

Answer:

stock under debt ..............

Answer 2

Answer:

Option - stock valuation is a correct answer.

Explanation:

• The required rate of return for a shareholder's multiple equity investments is referred to as the cost of equity.
• In other words, it's the monetary reward they expect for taking the risk of investing in your business.
• The difference between an asset's value and its liabilities is referred to as equity.
• After assets have been liquidated and debts have been paid, this is the money that will be refunded.
• When it comes to stock valuation, the cost of equity is crucial. If you invest in something, you want your money to grow at least as much as the cost of equity.
• The cost of equity can assist in determining the value of a stock investment.

Hence, the cost of equity is a key factor in stock valuation.

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