Remove Market Risk Remove Risk-free Rate Remove Treasury
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Discounted-Cash-Flow-Analysis: Your Complete Guide with Examples

Valutico

Rf = Risk-free Rate. Rm – Rf) = Equity Market Risk Premium. Risk free rate (can use 10y Treasury). Market Return. The details of how the CAPM works is beyond the scope of this article but in short, the formula is as follows: Ce = Rf + B x (Rm – Rf) + Cp. B = Beta. (Rm

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Startup Valuation: The Ultimate Guide

Equidam

10] , [23] , [2] Discount Rate: The rate used to discount future cash flows is typically the cost of equity, calculated via the Capital Asset Pricing Model (CAPM): Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium. [23] 23] Risk-Free Rate: Tied to government bond yields (e.g.,