Based on DCF module section, it was recommended to use discount rate of long term average yield for 10 year treasury which was 6.51% . Would this still be considered applicable to date since for the past 10 years yield have not exceeded 3.21% ?Also based on current volatility of the yield, what would the most suitable recommendation discount rate to look at?
Looking forward to your advice. Thank you.
You can use the discounted rate based on your own country risk-free rate. For instance, in Singapore, the risk-free rate is the CPF special account rate at 4%. It will act as an opportunity cost.
For US, the long term treasury rate is about 6% but the past 10 years is only 2.1%. Hence, if you want use 2.1% as the risk-free rate is also visible.
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