Let's imagine you're selling your house When someone wants to buy it from you, they have to pay you money. sometimes there's a disagreement about how much money should be paid we need to figure out the right amount in a fair way There are two special tools that are used to figure out the fair amount of money One is called the "cost of equity," and the other is the "safe rate." Cost of equity: would be suitable if your house was part of a larger property or real estate market considering factors like how much the property value changes over time and the extra profit people expect for taking on the risk of owning property