At this point, you have made it reasonably far into this book and are feeling pretty good about yourself. That’s all fine and dandy, but no good book on financial concepts would be complete without a section that causes you to rethink your intellect and, more important, your value as a contributing member of society. For that reason, I give you cost of capital.

Almost everyone has a friend who dates only people who are volatile and high risk. When things are good, they’re really good, and when things are bad, they’re really bad. The relationship is a veritable roller coaster with constant highs and lows. And of course, almost everyone has a friend who dates only people who are stable, secure, and low risk. Monotony and routine ...

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