Cost of Equity Capital

Cost of Equity Capital - Cost of equity capital is a calculation to tell how much a company or corporation's common stockholders will require to generate a specific rate or return. This is normally accomplished by taking the dividends earned on each share and dividing it by the share's current market value, and then adding the share's dividend growth rate to the equation to equal the rate or return required. The stockholder's equity is generally referred to as the book value of the company or corporation. Stockholder's Equity equals the total assets minus the total liabilities.

Countercyclical Stock - Countercyclical Stock is a stock, which moves in the exact opposite direction the general economy is moving. If the current economy was suffering through a recession, this specific countercyclical stock would be going in an upward direction, increasing in price. This generally occurs in companies and corporations, specifically those that are industrial in nature, with a stable supply and demand, such as consumer products and staples. So it stands to reason that if the current economy is booming, these stocks would not appear to be doing as well and would have a downward trend.

Coverage Initiated - Coverage initiated is when a research firm, brokerage, or analyst starts coverage, which is tracking a stock, which leads to subsequent publishing of company or stock reports, recommendations, and research, related to the issue, for a particular stock or sector, be it industry, society, or economy of the stock market. Other sectors found in the stock market include health care, financial, technology, energy, basic materials, consumer cyclical, communications, utilities, defensive, consumer staples, and capital goods.