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