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Social discount rate (SDR) is the discount rate used in computing the value of funds spent on social projects. Discount rates are used to put a present value on costs and benefits that will occur at a later date.
The amount of extra profit a shareholder requires to prefer that the company buy the equipment rather than giving them the profit now is based on the shareholder's discount rate. A common way of estimating shareholders' discount rates uses share price data is known as the capital asset pricing model.
In financial economics, the dividend discount model (DDM) is a method of valuing the price of a company's capital stock or business value based on the assertion that intrinsic value is determined by the sum of future cash flows from dividend payments to shareholders, discounted back to their present value.
In finance, discounting is a mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee. [1]
Each cash inflow/outflow is discounted back to its present value (PV). Then all are summed such that NPV is the sum of all terms: = (+) where: t is the time of the cash flow; i is the discount rate, i.e. the return that could be earned per unit of time on an investment with similar risk
The concept of the stochastic discount factor (SDF) is used in financial economics and mathematical finance.The name derives from the price of an asset being computable by "discounting" the future cash flow ~ by the stochastic factor ~, and then taking the expectation. [1]
Hyperbolic discounting is mathematically described as = + where g(D) is the discount factor that multiplies the value of the reward, D is the delay in the reward, and k is a parameter governing the degree of discounting (for example, the interest rate).
Bank rate, also known as discount rate in American English, [1] and (familiarly) the base rate in British English, [2] is the rate of interest which a central bank charges on its loans and advances to a commercial bank.