Study On Discount Rate And Its Quantification

For the needs of proper appraisal for the internal value of corporations, the right choose of the discount rate is very important. But research shows that the confusion of discount rate and anticipated return rate, capital cost exists widespread. This paper will do research on the relationship of these concepts to standardize the connotation of discount rate, and to do deep study on its judgement. In the course of qualitative investigation, the corporation is analyzed as investor and fund raiser separately at first, and then unified in the one according to the connection of the two roles in order to obtain an unification frame of the discount rate. Quantitative investigation will be done on the basis of the frame, and be transformed to be the quantitation of anticipated return rate and capital cost. After the quantification model comes out, Analysis on its necessary conditions domestically will be done, and some variables concerned will be adjusted to some extent. The creation of this paper is to clear the relationship of discount rate and concepts concerned, to standardize the concept connotations, and also to provide some mentality and inspiration for deeper study on this area in the future.