The return demanded by shareholders for the risk that they bear in supplying capital to the firm is

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The return demanded by shareholders for the risk they bear in supplying capital to the firm is called the cost of equity. This cost of equity is a critical component in determining a firm's overall cost of capital, and it reflects the return that equity investors expect to receive from investing in the firm. This return is typically higher for riskier firms and is based on factors such as the expected growth rate of the company and the perceived level of risk associated with its operations.

The Return Demanded by Shareholders for the Risk That They