Paper Title
The Method of Determining Discount Rates in Corporate Practice
Abstract
Defining the discount rate is one of the complex tasks in corporate practice. There is no common method used for its calculation, corporate experts can choose from a number of recommendations instead. There are several recommendations preferring discount rates related to capital structure; others make a criticism of this way of calculation. Considering the fact that defining the discount rate is mostly based on estimation, its value is affected not only by objective but also by some subjective factors. In this article, firstly we summarize the international research results in relation to the methods of determining discount rates. Then, based on a questionnaire survey, we present the various methods of how enterprises operating in the Hungarian processing industry determine discount rates during their preparations for decision-making.
Keywords - Discount Rate, Corporate