Discount Rate

Yahoo  May 24  Comment 
The number of Federal Reserve banks pushing the central bank to raise the rate it charges commercial banks for emergency loans rose to four in April from two in March, minutes from the Fed's discount rate meeting released on Tuesday showed. The...
Wall Street Journal  Apr 12  Comment 
Two of the Federal Reserve’s 12 regional reserve banks wanted to raise the interest rate on discount-window loans ahead of the central bank’s March policy meeting, up from zero in January, according to minutes published Tuesday.
Motley Fool  Feb 1  Comment 
The two definitions of discount rate that you need to know.
Yahoo  Nov 24  Comment 
The number of regional Federal Reserve banks pushing for a hike in what commercial banks are charged for emergency loans rose to nine in October, a sign the U.S. central bank may be close to tightening monetary policy, minutes from its discount...
Yahoo  Oct 13  Comment 
The number of Federal Reserve banks pushing the central bank to raise the rate it charges commercial banks for emergency loans rose to eight in September from five in July, minutes from the Fed's discount rate meeting showed. Ahead of the Fed's...
Mondo Visione  Sep 3  Comment 
Long Finance publishes a new report titled "Uses and Abuses of Discount Rates: A Primer for the Wary" by Dr Nick Goddard. The publication seeks to provide an overview of discount rates, their use and implications over time. Discounted cash...
Financial Times  May 23  Comment 
Larger-than-expected move aimed at spurring growth as SBP says it inflation will remain subdued


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A discount rate is used to determine the present value of a set of future cash flows. When an analyst wishes to value a company, the company's discount rate is the rate that they expect to earn on investments in their business. The discount rate is commonly used to determine a company's value using a discounted cash flow (DCF) valuation. In a DCF valuation, the discount rate is the rate at which future cash flows are discounted when finding their current value. In that sense, the discount rate is the expected return on future projects within a company.

It is important to note that the discount rate is not a fixed value for any given company, but instead it is a subjective value. No one can determine exactly how much a company will earn on future investments and as such no one could determine the exact discount rate to use during a valuation. In most cases, analysts will use historic figures along with the discount rate of comparable investments when selecting the discount rate to use in a valuation analysis.

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