Discounting a future cash flow expresses future returns in today's dollars. This allows a fair comparison between initial business expenses and your expected or realized returns. As an example, you ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

A discount rate is a percentage rate that investors use to measure the value of future cash flows in today's dollars. A discount rate has a wide variety of applications in terms of analyzing ...

Christina Majaski writes and edits finance, credit cards, and travel content. She has 14+ years of experience with print and digital publications. Vikki Velasquez is a researcher and writer who has ...

DDM values stocks based on sum of all future dividends using a company's cost of capital. Most common DDM, the Gordon Growth Model, calculates stock price by dividing next year’s expected dividend by ...