Discount Rate

Discount Rate

A lot of firms use this as a starting point to calculate their discount rate, called the weighted average cost of capital. Which is just how much it cost them to borrow or to get that capital that they’re now considering making this investment with. The discount rate for each investor might be very different, because for some investors, if they didn’t make this investment, maybe their only other option is to put it in a savings account that gives them one or two percent return a year.