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  2. Discounting - Wikipedia

    en.wikipedia.org/wiki/Discounting

    [2] [6] The "discount rate" is the rate at which the "discount" must grow as the delay in payment is extended. [7] This fact is directly tied into the time value of money and its calculations. [1] The present value of $1,000, 100 years into the future. Curves representing constant discount rates of 2%, 3%, 5%, and 7%

  3. Annual effective discount rate - Wikipedia

    en.wikipedia.org/wiki/Annual_effective_discount_rate

    The discount rate is commonly used for U.S. Treasury bills and similar financial instruments. For example, consider a government bond that sells for $95 ('balance' in the bond at the start of period) and pays $100 ('balance' in the bond at the end of period) in a year's time. The discount rate is

  4. Discounted cash flow - Wikipedia

    en.wikipedia.org/wiki/Discounted_cash_flow

    Discount Rate: The cost of capital (Debt and Equity) for the business. This rate, which acts like an interest rate on future Cash inflows, is used to convert them into current dollar equivalents. This rate, which acts like an interest rate on future Cash inflows, is used to convert them into current dollar equivalents.

  5. Net present value - Wikipedia

    en.wikipedia.org/wiki/Net_present_value

    After the cash flow for each period is calculated, the present value (PV) of each one is achieved by discounting its future value (see Formula) at a periodic rate of return (the rate of return dictated by the market). NPV is the sum of all the discounted future cash flows.

  6. Discount rate - Wikipedia

    en.wikipedia.org/wiki/Discount_rate

    Discount rate may refer to: Social discount rate (of consumption), the rate at which the weight given to future consumption decreases in economic models;

  7. Terminal value (finance) - Wikipedia

    en.wikipedia.org/wiki/Terminal_value_(finance)

    k = Discount Rate. g = Growth Rate. T 0 is the value of future cash flows; here dividends. When the valuation is based on free cash flow to firm then the formula becomes [+ ()], where the discount rate is correspondingly the weighted average cost of capital.

  8. Stochastic discount factor - Wikipedia

    en.wikipedia.org/wiki/Stochastic_discount_factor

    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 x ~ i {\displaystyle {\tilde {x}}_{i}} by the stochastic factor m ~ {\displaystyle {\tilde {m}}} , and then taking the expectation. [ 1 ]

  9. Hyperbolic discounting - Wikipedia

    en.wikipedia.org/wiki/Hyperbolic_discounting

    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). This is compared with the formula for exponential discounting: =