can anyone tell what is discount factor while calculating value of an enterprise.
Firm Value Less Debt and we get equity value from which discount factor is deducted at some rate.
what is that discount factor?

Question

can anyone tell what is discount factor while calculating value of an enterprise.
Firm Value Less Debt and we get equity value from which discount factor is deducted at some rate.
what is that discount factor?

anonymous · Answer

Welcome to Open Study. :)

I dunno, may be another user will help you :D

anonymous · Answer

Thank you
:)

anonymous · Answer

Hi the discount factor is the cost of capital which is the rate used to assess the componets of ,financing in this case equity and debt . In some books the discount factor is the WACC the weighted average cost of capital. This rate is useful to know the cost a firm is using to finance itself in the capital markets