article thumbnail

Discount Rate—Explanation, Definition and Examples

Valutico

The WACC considers the cost of equity, the cost of debt, and the proportion of equity and debt in the company’s capital structure. Cost of Debt (Rd): The cost of debt refers to the effective interest rate that a company pays on its debt, such as bonds, loans, or other forms of borrowing.

article thumbnail

DEBRA, next big tax reform in Europe?

Simply Treasury

The idea is not new to encourage companies to increase their capitalization and reduce their bank debt (partly through more recourse to the capital market - CMU project). The rate would be calculated based on a 10-year "risk-free interest" rate depending on the currency, increased by a 1% risk premium (1.5%

Equity 52