ERM Glossary: Risk discount rate

[this page | pdf | references | back links | custom searches]

The risk discount rate is the rate at which future uncertain cash flows may be discounted when carrying out a discounted cash flow (DCF) assessment of the value of a project. It can be viewed as representing the risk-free rate of return (in a given currency) that providers of capital demand plus an amount to allow for the risk that the profits from the project may not emerge as expected.


Contents | Prev | Next

Desktop view | Switch to Mobile