Discount rate - Revision history

imported>Doug Williamson: Layout.

2022-07-07T00:05:07Z

Layout.

← Older revision		Revision as of 00:05, 7 July 2022
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	===Other ~~links=~~==		==Other resource==
	[http://www.treasurers.org/node/8837 Students: Triumph with timelines, The Treasurer, March 2013]		[http://www.treasurers.org/node/8837 Students: Triumph with timelines, The Treasurer, March 2013]

	[[Category:Corporate_finance]]		[[Category:Corporate_finance]]

imported>Doug Williamson: Layout.

2022-02-16T11:53:48Z

Layout.

← Older revision		Revision as of 11:53, 16 February 2022
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	'Discount rate' is often used as a synonym for the [[cost of capital]].		'Discount rate' is often used as a synonym for the [[cost of capital]].

	In this context, discount rate is the generic name for the rate of interest at which the future cash flows of a proposed investment are discounted in order to obtain the net present value of the cash flows.		In this context, discount rate is the generic name for the rate of interest at which the future cash flows of a proposed investment are discounted, in order to obtain the net present value of the cash flows.

imported>Doug Williamson: Update - source - Association of Corporate Treasurers - email from Naresh Aggarwal 16 Feb 2022.

2022-02-16T11:53:23Z

Update - source - Association of Corporate Treasurers - email from Naresh Aggarwal 16 Feb 2022.

← Older revision		Revision as of 11:53, 16 February 2022
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	'Discount rate' is often used as a synonym for the [[cost of capital]].		'Discount rate' is often used as a synonym for the [[cost of capital]].

	In ~~these contexts~~, discount rate ~~means~~ the ~~yield used~~ to ~~calculate [[~~discount ~~factor]]s and present values~~.		In this context, discount rate is the generic name for the rate of interest at which the future cash flows of a proposed investment are discounted in order to obtain the net present value of the cash flows.


			The choice of discount rate should reflect the risks of the investment or project.


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	The discount rate acts as a benchmark for interest rates issued.		The discount rate acts as a benchmark for interest rates issued.


	Other central banks also have similar discount rates.		Other central banks also have similar discount rates.
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	== See also ==		== See also ==
			* [[Benchmark]]
	* [[Cost of capital]]		* [[Cost of capital]]
	* [[Direction of influence]]		* [[Direction of influence]]
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	* [[Discount instruments]]		* [[Discount instruments]]
	* [[Discounted cash flow]]		* [[Discounted cash flow]]
			* [[Discount factor]]
	* [[Future value]]		* [[Future value]]
	* [[Interest rate]]		* [[Interest rate]]

imported>Doug Williamson: Remove link.

2021-03-25T16:02:36Z

Remove link.

← Older revision		Revision as of 16:02, 25 March 2021
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	* [[Discount instruments]]		* [[Discount instruments]]
	* [[Discounted cash flow]]		* [[Discounted cash flow]]
	* [[DR]]
	* [[Future value]]		* [[Future value]]
	* [[Interest rate]]		* [[Interest rate]]

imported>Doug Williamson: Add link.

2020-12-13T18:59:00Z

Add link.

← Older revision		Revision as of 18:59, 13 December 2020
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	* [[Interest rate]]		* [[Interest rate]]
	* [[Monetary policy]]		* [[Monetary policy]]
			* [[Net present value]]
	* [[Nominal annual discount rate]]		* [[Nominal annual discount rate]]
	* [[Periodic discount rate]]		* [[Periodic discount rate]]

imported>Doug Williamson: Add links.

2020-11-16T15:38:24Z

Add links.

← Older revision		Revision as of 15:38, 16 November 2020
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	* [[Discounted cash flow]]		* [[Discounted cash flow]]
	* [[DR]]		* [[DR]]
			* [[Future value]]
	* [[Interest rate]]		* [[Interest rate]]
	* [[Monetary policy]]		* [[Monetary policy]]
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	* [[Periodic discount rate]]		* [[Periodic discount rate]]
	* [[Periodic rate]]		* [[Periodic rate]]
			* [[Present value]]
	* [[Yield]]		* [[Yield]]

imported>Doug Williamson: Layout.

2020-11-16T15:37:24Z

Layout.

← Older revision		Revision as of 15:37, 16 November 2020
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	1. ''Cost of capital.''		1. ''Cost of capital.''

	A synonym ~~the~~ the [[cost of capital]].		'Discount rate' is often used as a synonym for the [[cost of capital]].

	In these contexts, discount rate means the yield used to calculate [[discount factor]]s and present values.		In these contexts, discount rate means the yield used to calculate [[discount factor]]s and present values.

imported>Doug Williamson: Reorder.

2020-11-16T15:36:45Z

Reorder.

← Older revision		Revision as of 15:36, 16 November 2020
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	(DR).		(DR).

	1. ''Short-term markets.''		1. ''Cost of capital.''

			A synonym the the [[cost of capital]].

			In these contexts, discount rate means the yield used to calculate [[discount factor]]s and present values.


			2. ''Short-term markets.''

	In short-term financial markets, 'discount rate' means the quoted market rate for traded instruments quoted at a discount.		In short-term financial markets, 'discount rate' means the quoted market rate for traded instruments quoted at a discount.
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	The discount rate of 20% and the yield of 25% both summarise the same deal, using different conventional bases.		The discount rate of 20% and the yield of 25% both summarise the same deal, using different conventional bases.



	~~2. ''Cost of capital.''~~

	~~The term 'discount rate' is used in certain other contexts as a synonym the the [[cost of capital]].~~

	~~In these contexts, discount rate means the yield used to calculate [[discount factor]]s and present values.~~

imported>Doug Williamson: Add link.

2019-10-16T11:01:35Z

Add link.

← Older revision		Revision as of 11:01, 16 October 2019
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	== See also ==		== See also ==
	* [[Cost of capital]]		* [[Cost of capital]]
			* [[Direction of influence]]
	* [[Discount]]		* [[Discount]]
	* [[Discount basis]]		* [[Discount basis]]

imported>Doug Williamson: Add headers.

2019-03-03T13:18:40Z

Add headers.

← Older revision		Revision as of 13:18, 3 March 2019
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	(DR).		(DR).

	1.		1. ''Short-term markets.''

	In short-term financial markets, 'discount rate' means the quoted market rate for traded instruments quoted at a discount.		In short-term financial markets, 'discount rate' means the quoted market rate for traded instruments quoted at a discount.
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	In the US the market discount rate is sometimes known as the ''discount yield''.		In the US the market, discount rate is sometimes known as the ''discount yield''.

	This is different from a [[yield]] or interest rate, which is conventionally quoted based on a percentage of the ''starting amount''.		This is different from a [[yield]] or interest rate, which is conventionally quoted based on a percentage of the ''starting amount''.
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	2.		2. ''Cost of capital.''

	The term 'discount rate' is used in certain other contexts as a synonym the the [[cost of capital]].		The term 'discount rate' is used in certain other contexts as a synonym the the [[cost of capital]].
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	3.		3. ''Pensions.''

	In the field of pensions, discount rate means the rate used to discount future liabilities of a Defined benefit pension scheme in order to calculate the present value of the liabilities, often for the purpose of comparing them with the market value of the scheme’s assets.		In the field of pensions, discount rate means the rate used to discount future liabilities of a Defined benefit pension scheme in order to calculate the present value of the liabilities, often for the purpose of comparing them with the market value of the scheme’s assets.
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	4.		4. ''Central banking.''

	In US central banking, the term 'discount rate' means the interest rate that member banks pay the Federal Reserve when the banks use securities as collateral. The discount rate acts as a benchmark for interest rates issued.		In US central banking, the term 'discount rate' means the interest rate that member banks pay the Federal Reserve when the banks use securities as collateral.

			The discount rate acts as a benchmark for interest rates issued.

	Other central banks also have similar discount rates.		Other central banks also have similar discount rates.