Accurate valuations are paramount in financial analysis, influencing corporate strategies, as well as investment decisions and market perceptions. Among various valuation methods, the discounted cash ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

A discount rate is a percentage rate that investors use to measure the value of future cash flows in today's dollars. A discount rate has a wide variety of applications in terms of analyzing ...

When you apply for a mortgage, your lender will probably quote you an interest rate -- say, 4.5%. The problem with the interest rate is that is doesn't usually reflect the true cost of borrowing money ...

The Gordon model allows for the fact that the market might put a price on a stock that's different from what you might estimate using the equation above. A higher stock price than predicted implies a ...

Discounting a future cash flow expresses future returns in today's dollars. This allows a fair comparison between initial business expenses and your expected or realized returns. As an example, you ...

First, let’s be clear on what the discount rate is. If we consider valuation calculations as a two-step process, the first step is to determine the expected future cash flows from the pension scheme ...

The discount factor of a company is the rate of return that a capital expenditure project must meet to be accepted. It is used to calculate the net present value of future cash flows from a project ...

The discount rate is used to calculate how much the expected future income from an investment over a given period of time is worth right now (the net present value), which can help you decide what you ...