Investment Fundamentals

Discount Rate

Definition

What is Discount Rate?

The rate used to convert future cash flows into present value.

Example in practice

An analyst discounts a company's expected cash flows at 15% to reflect time and risk.

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The original amount of money invested or lent, excluding later returns.

Money or other resources committed to produce income, growth, or another economic benefit.

An asset or commitment of money made with the expectation of future income, growth, or both.

Anything with economic value that can be owned or controlled.

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