Katie owns 100 shares of ABC stock.Which one of the following terms is used to refer to the return that Katie and the other shareholders require on their investment in ABC?

Question

Quizplus · Accepted Answer

The return that Katie and other shareholders require on their investment in ABC is referred to as the cost of equity. This is the return that investors expect to receive from the company's stock in the form of dividends and capital gains. It represents the minimum rate of return that the company must earn on its investments to meet the expectations of its shareholders. Options A, B, C, and D are not applicable in this case.

Katie Owns 100 Shares of ABC Stock