# How To Calculate Discount Rate

this post has clarified how you can calculate the discount rate or wacc luz develops management tools for companies including a worksheet valuation which

the present value of the bonds principal tells you its current worth based on the current market interest rate

rs and generates annual cash inflow of rs rs rs rs and rs in five years the discount rate is assumed to be

the most generally accepted techniques to calculate a terminal value are by applying the gordon growth approach using an ebitda exit multiple and using a

in other words because we bought the bond for a discount our effective ytm is slightly higher than the bonds coupon interest rate

next we need to calculate what is the net value of the assets future discounted cash flows for that you use a formula called net present value npv

federal reserve system assets liabilities government securities and mortgage backed securities currency in circulation discount loans reserves

one way you can compare these two amounts is to calculate the discount rate that gives a npv of zero