Discount Rate

Insurance Journal  Mar 29  Comment 
The Texas Department of Insurance, Division of Workers’ Compensation reports that the workers’ comp discount rate and interest rate for April 1 to June 30, 2017, will be 4.50 percent. The rate is computed by using the federal treasury constant...
Insurance Journal  Mar 20  Comment 
The Travelers Companies Inc. has estimated  impact of the recent decision by the UK Ministry of Justice to reduce the discount rate applied to lump-sum bodily injury payouts, known as the Ogden rate, from +2.5 percent to -0.75 percent. Travelers …
Insurance Journal  Mar 1  Comment 
The earnings of U.K. insurers likely will be hit by reserve strengthening following the U.K. government’s announcement of a dramatic cut to the discount rate used to calculate lump-sum personal injury compensation, according to A.M. Best. Motor...
MarketWatch  Feb 28  Comment 
Only two of the Fed’s 12 regional reserve banks wanted to raise the interest rate on discount window loans ahead of the Jan. 31-Feb. 1 meeting, according to minutes released Tuesday.  Feb 27  Comment 
Update on Ogden Discount Rate and deferral to 8 March 2017 of the Group's preliminary results announcement for the year ended 31December 2016 27 February 2017 Admiral Group plc notes today's announcement by the Lord Chancellor of a...
TechCrunch  Feb 22  Comment 
 Disrupt NY is but a few short weeks away, and the agenda is shaping up to be pretty awesome. Today, I’m pleased to announce that we will be joined by Ford CTO Raj Nair and WayUp CEO Liz Wessel for firesides chats who join the trio of amazing...
Mondo Visione  Dec 21  Comment 
The California Public Employees' Retirement System (CalPERS) Board of Administration today voted to lower the discount rate from 7.5 percent to 7.0 percent over the next three years. This incremental lowering of the discount rate will give...
MarketWatch  Oct 5  Comment 
Silly articles don’t help the process
Clusterstock  Aug 23  Comment 
WASHINGTON (Reuters) - The number of regional Federal Reserve banks calling on the central bank to raise the rate it charges commercial banks for emergency loans rose to eight in July, minutes from the Fed's discount rate meeting released on...
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...


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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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