COST OF EQUITY Definition

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COST OF EQUITY (COE) is the minimum rate of return a firm must offer owners to compensate for waiting for their returns, and for bearing risk. It is calculated: COE = Dividends per Share (for next year) / Current Market Value of Stock + Growth Rate of Dividends.

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FORCED LIQUIDATION VALUE is the value at which the asset or assets are sold as quickly as possible, such as at auction.

COST AVOIDANCE is an action taken in the present designed to decrease costs in the future.

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