Valutico

FEBRUARY 27, 2024

To refine the selection of the discount rate, it’s important to draw on inputs from credible sources regarding economic, industry and company specific risk factors. The WACC represents the overall cost of financing a company’s operations and is used to discount future cash flows to their present value.

Discounted Cash Flow 52

Discounted Cash Flow Risk Premium Risk-free Rate Weighted Average Cost of Capital 52

Andrew Stolz

AUGUST 5, 2020

If an investor moves money from the risk-free asset into the stock market, they should expect to earn a return in excess of the risk-free rate, what is called an equity risk premium. Unsystematic risks are risks specific to a particular stock, which is why they are also called, company-specific risk.

Risk-free Rate 52

Risk-free Rate Beta Weighted Average Cost of Capital Risk Premium 52

Equilest

JULY 10, 2023

Market volatility, regulatory changes, interest rate fluctuations, tenant turnover, and project-specific risks are examples of factors that can impact a company's value. Assessing and quantifying these risks helps determine an appropriate discount rate or risk premium when calculating the company's value.

Business Valuation 40

Business Valuation Asset-based Approach Risk Premium Price to Earnings 40