Airport valuation: What discount rate to use?

Baginski's picture
Rank: Baboon | banana points 111

I am valuating a public not-for-profit airport that is set for privatization. What discount rate can I use to do a DCF?

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Comments (5)

Nov 10, 2017

5.5%

Nov 10, 2017

I mean should I use CAPM, WACC, IRR, or make one up?

Nov 10, 2017

You run valuations from the perspective of the BUYER. If it's an open market investor, CAPM. For a M&A, WACC. For PE, you should have a target rate. IRR is good there.
If all else fails, use the Rf Rate, then apply a haircut.

Nov 10, 2017