Market Risk Marketability Specific Risk Weighted Average Cost of Capital 
Valutico
FEBRUARY 27, 2024
In DCF analysis, the Weighted Average Cost of Capital (WACC), representing the average return required by all stakeholders, is commonly used as the discount rate. The discount rate must be carefully chosen to reflect unique company risks and characteristics, and also changes in economic conditions.
Andrew Stolz
AUGUST 5, 2020
It helps an investor understand what to expect to earn in relation to the risk-free rate and the market return. CAPM assumes that the minimum a rational investor would earn is the risk-free rate by buying the risk-free asset. What Impacts the Capital Asset Pricing Model? The Capital Asset Pricing Model in Practice.
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