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Fundamental
Discount Rate
Rate used to discount future cash flows; reflects risk and time value
Definition
Discount rate converts future cash flows to present value, accounting for time value of money and risk. In DCF analysis, it's typically the WACC. Higher discount rates reduce present values, making future cash flows worth less today.
Related Topics
#present value
#time value of money
#risk premium
#dcf
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Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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