What Is A Discount Rate?

A discount rate is the rate of interest used in a DCF to convert future cash flows into a present cash value. The discount rate has to take into account the risk of future cash flows, as well as the time value of money (i.e. cash now is worth more than the same amount of cash in the future).

To learn more about this concept and become a master at DCF modeling, you should check out our DCF Modeling Course. Learn more here. 

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