Answer:
c. Cost of equity
Explanation:
The term used to refer is the cost of equity because this cost ‘represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership’. Kate’s 100 shares represent her rate of return in investing in ABC stock, representing her cost of equity spend on that ABC stock. Moreover, Katie chose well investing using this method because in the long run returns more profit than the cost of debt, where she would collect exactly how much she invested, but no interest rate on it.
