Comps Risk-free Rate Weighted Average Cost of Capital 
Equidam
APRIL 26, 2025
Comparable Transactions (as a Primary Method): This method, often referred to as “comps,” involves applying valuation multiples (e.g., Discount Rate (Cost of Equity): The rate used to discount future cash flows reflects the riskiness of the investment.
Valutico
OCTOBER 20, 2022
the asset-based approach also known as the cost-based approach, and finally 3. the multiple based or ‘ comps ’ (comparable company analysis) approach. FCF n is the free cash flow in year n, being the last forecast period. g is the terminal growth rate. Ce = Cost of Equity. Rf = Risk-free Rate.
Equidam
APRIL 22, 2025
Discount Rates / Risk Premiums: The discount rate used in DCF analysis (often the WACC) incorporates elements sensitive to market conditions. [21] 21] [22] [24] [27] The cost of equity component includes the market risk premium the excess return investors expect for investing in the broader market over a risk-free rate.
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