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Discounting [14]

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Bullet points include: Same answer if budgeted expected returns on assets (reduced by any allowance for prudence) same as returns implied by current prices C.f. investment analyst recommendations Analyses what (intrinsic) ‘value’ analyst thinks ought to be ascribed to company Will normally differ from (market) price Corollary: using budgeting discount rates (if different from matching discount rates and if applied to mismatched positions) involves investment views These may be ‘conventional’, e.g. that equities should outperform bonds over the long term, but are still views, i.e. not sure to happen

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