8. Please fill all the boxed with appropriate words.

Institutional investors which performs the following function is called _____ (Buys companies, improves them, and then sells them to another private investor or to the public markets.) And a measure of how much a stock moves with the broader market is called _____. A security with the following characteristics is called _____ (Its holders get paid before common stockholders in the case of bankruptcy; may get dividends even when common stockholders get no dividends; and is associated with ownership in the company, unlike debt.)

The cost of equity of a firm can be calculated by taking the _____ and adding the market risk premium adjusted by the variability of the firm's share price relative to the whole market. Positive NPV projects will have rates of return greater than the _____ and thus create value. When you are valuing a company, the usual methodology is to forecast near-term cashflows based on available information and use the growing perpetuity formula beyond that for the _____.

One reason that firms conduct share buybacks instead of paying dividends is because share repurchases may receive favorable _____ treatment compared to payment of dividends. In order to reduce the risk of overpaying for an acquisition, firms need to undertake prudent valuation by, for example, conducting _____ as part of due diligence.