Beta Presentation Risk Premium Risk-free Rate 
Valutico
FEBRUARY 27, 2024
Key takeaways: The discount rate is primarily used by central banks to manage the economy and investors to calculate the present value of future cash flows from an investment. It’s vital to determine the correct discount rate for company valuation, factoring in the time value of money. In this article, we cover the latter.
Andrew Stolz
MARCH 20, 2020
The formula implies the return an investor expects from a risk-free investment plus the return from the stock in relation to market volatility. The market risk premium is calculated from a market rate of return less a risk-free rate. Lower WACC can increase the present value of a firm.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Brian DeChesare
MAY 3, 2023
If you think about a standard DCF, metrics like Unlevered Free Cash Flow and Levered Free Cash Flow are a bit “imaginary” – because no company distributes them to its investors. Interest Income and Interest Expense are based on the changing interest rates times these balances.
Musings on Markets
JANUARY 12, 2021
Thus, you and I can disagree about whether beta is a good measure of risk, but not on the principle that no matter what definition of risk you ultimately choose, riskier investments need higher hurdles than safer investments.
Valutico
OCTOBER 20, 2022
The DCF method takes the value of the company to be equal to all future cash flows of that business, discounted to a present value by using an appropriate discount rate. A discount rate, or discount ‘factor’, is calculated and applied to each year’s cash flow, in order to arrive at the present value. . It was worth $24.8
Expert insights. Personalized for you.
52 
Let's personalize your content