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    Nida Naseer
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    This document provides definitions for key terms used in a corporate finance foundations course, including beta, capital asset pricing model (CAPM), equity risk premium, initial public offering (IPO), risk-free rate, and weighted average cost of capital (WACC). It defines beta as a measure of investment risk relative to the overall market and defines the other terms as related to valuation methods, required rates of return, share offerings, and weighted costs of financing.

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    This document provides definitions for key terms used in a corporate finance foundations course, including beta, capital asset pricing model (CAPM), equity risk premium, initial public offering (IPO), risk-free rate, and weighted average cost of capital (WACC). It defines beta as a measure of investment risk relative to the overall market and defines the other terms as related to valuation methods, required rates of return, share offerings, and weighted costs of financing.

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    18 views1 page

    Glossary Corporate Finance Foundations

    Uploaded by

    Nida Naseer
    This document provides definitions for key terms used in a corporate finance foundations course, including beta, capital asset pricing model (CAPM), equity risk premium, initial public offering (IPO), risk-free rate, and weighted average cost of capital (WACC). It defines beta as a measure of investment risk relative to the overall market and defines the other terms as related to valuation methods, required rates of return, share offerings, and weighted costs of financing.

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    GLOSSARY

    Corporate Finance Foundations


    With Jim Stice and Kay Stice

    Use these terms and definitions below to understand concepts taught in the course.

    Transcript Search: note that you can search for terms directly within the course. To search video text, switch to the
    Transcripts tab, then press Cmd/Ctrl + F on your keyboard to run a search within the active transcript.

    Term Definition

    beta A measure of the sensitivity of the rate of return of an investment to the


    performance of the overall market; a measure of the risk that cannot be
    eliminated by diversification

    capital asset pricing Method for calculating value of assets


    model (CAPM)

    equity risk premium Rate of return required for investment in an endeavor over and above
    the risk-free rate

    initial public offering Inaugural opening of the sale of shares to all investors
    (IPO)

    risk-free rate Return expected or needed for an absolutely certain investment

    weighted average Overall cost of a mix of financing methods


    cost of capital
    (WACC)

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