Sentences with phrase «appropriate discount rate»

One can try to look at the scenarios across the tranches, and see which tranches have cash flows that behave like bonds, equities, and warrants, and apply appropriate discount rates like 6 %, 20 %, and 40 % respectively.

a. ECS = 1.65 to 3.2 C b. Emissions rates, e.g. RCP4.5, 6, 8.5 c. Damage function =??? (This is the most critical of all, but I don't understand the input parameters or how how to vary them to give justifiable range of impacts) d. Appropriate discount rates, e.g. = 3 %, 5 %, 7 %, 10 % (i.e., up to what has been widely used by aid agencies for investment decisions for infrastructure projects over the past half century or so — e.g. 10 % and 12 % by World Bank for energy projects).

Yes, if you have a stream of future expected cash flows and need to estimate a fair price, interest rates should inform your choice of an appropriate discount rate.

You can then discount the annual EPS estimates and the future terminal value back to the present value by using an appropriate discount rate.

In the second step, the model estimates the appropriate discount rate for the security, which in the case of RMBS is expressed as a trading margin — the difference between the yield on the RMBS and the Australian dollar swap rate for the tenor corresponding to the WAL of the RMBS.

In this model, which was developed many decades ago by investors and is a common valuation method, you sum up all future estimated dividends, discount them at an appropriate discount rate, and therefore receive an output for what the intrinsic value of a share of this company is.

The theoretical fair value of a bond is calculated by discounting the present value of its coupon payments by an appropriate discount rate.

What is the appropriate discount rate to use for a project?

In this model, which was developed many decades ago by investors and is a common valuation method, you sum up all future estimated dividends, discount them at an appropriate discount rate, and therefore receive an output for what the intrinsic value of a share of this company is.

If you know the appropriate discount rate at every relevant maturity, you could calculate the fair price of a bond.

Then the appropriate discount rate is determined for each cash flow depending on the valuation method used.

When discounting cash flows, the appropriate discount rate needs to represent the opportunity cost of the initial cash outlay.

The appropriate discount rate to use is dependent upon the risk of not receiving cash flows in the future.

If you owned a business outright, the present value would be the sum of the business» future earnings discounted to present value using an appropriate discount rate.

For example, if a 7 percent discount rate makes people indifferent to a benefit now versus a benefit later (for example, $ 100 today versus $ 107 a year from now), then 7 percent is the appropriate discount rate to use.

If you were a company and this was an expansion project, you would take the additional future income of the project and convert it into a present value by discounting the future cash flows with a risk - appropriate discount rate (which should be your average equity returns).