Questions tagged [discount-rate]

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Due-diligence behind discount window lending

Its clear the Federal reserve is doing risk assessments at the discount window since they separate credit into primary and secondary. I'm curious how secondary credit risk is handled. Given that ...
2
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1answer
286 views

Calculate optimal discount for product bundling

So recently I made some rules with my transaction data. Based on it I can determine which products are profitable to bundle it together. But even though I know e.g. product A→ product B, are there ...
2
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1answer
230 views

International Capital Asset Pricing Model (CAPM)

I wanted to value a High-tech start-up of which I have the cash flows of the coming 6 years. I decided to use the Discounted Cash Flow Method. To do so, I calculated the Discount rate. For a High-...
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0answers
66 views

Why is there a stochastic discount factor in firms present value?

In a book I am reading, the problem of the firms is described as maximizing current market value of profits. $$\max \sum_{k=0}^\infty \Delta_{t, t+k} \cdot "\text{profits in period k}"$$ So, ...
0
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0answers
8 views

Levelized cost of energy - why discount the amount of electricity as well

According to Wikipedia, the levelized cost of electricity is a measure of the average net present cost of electricity generation for a generating plant over its lifetime. According to the formula ...
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20 views

Consistency of Textbook Problems Involving Discount Rate

A book on Theory of Interest explains about the discount rate as a rate when the interest is paid at the beginning of period: If a person borrows \$100 for 1 year and with discount rate of 10% ...