Compound interest is the interest on the initial principal as well as the interest from the prior periods. It is also referred to as interest on interest.

The WACC is the average cost of raising capital from all sources, including equity, common shares, preferred shares, and debt. It represents the required return firms should earn to satisfy their investors.

The present value is the current value of future cash flows at a specific rate of return. The present value indicates that an amount of money today has a higher value than that same amount in the future.

To compensate for the risks that shareholders take, firms pay them in return. The theoretical return the firm pays its shareholders is known as the cost of equity. In other words, the cost of equity is the rate of returns a firm pays to its shareholders.

Inflation is when the prices of goods and services increase over time. While the prices of goods and services increase, the purchasing power or value of money decreases.

Future value is the value of a current asset at a specific time in the future calculated based on an assumed growth rate.

CAPM is a measure used by investors to evaluate the expected return on investments. It allows investors to diversify their investments to achieve the desired return based on the risk of each investment.

Time value of money describes how the sum of money that you hold currently is worth more than the equivalent sum in the future.

Equity-risk premium is the difference between expected returns from the stock market and the expected returns from risk-free investments.