EQUITY RISK PREMIUM Definition

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EQUITY RISK PREMIUM is a rate of return in addition to a risk-free rate to compensate for investing in equity instruments because they have a higher degree of probable risk than risk-free instruments (a component of the cost of equity capital or equity discount rate).

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EBIT is Earnings Before Interest and Tax. EBIT is an indicator of a companys financial performance calculated as revenue less expenses excluding tax and interest. It is sometimes referred to as operating earnings.

PROFIT MARGIN ON SALES is: a. Gross Profit Margin on Sales = Gross Profit/Sales * 100; or, b. Net Profit Margin on Sales = Net Profit After Tax/Sales * 100. See also GROSS PROFIT MARGIN ON SALES.

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