Best answer

These two factors -- the time value of money and uncertainty risk -- combine to form the theoretical basis for the discount rate. A higher discount rate implies greater uncertainty, the lower the present value of our future cash flow.

Answered by: Ryan Date created: May 20, 2022

What factors affect EPS?

Asked By: andy250 Date created: May 19, 2022

In summary, the key fundamental factors are:

  • The level of the earnings base (represented by measures such as EPS, cash flow per share, dividends per share)
  • The expected growth in the earnings base.
  • The discount rate, which is itself a function of inflation.
  • The perceived risk of the stock.
Answered By: OmG3r Date created: May 22, 2022

How does discount rate affect IRR?

Asked By: Andre.Santarosa Date created: May 09, 2022

The IRR equals the discount rate that makes the NPV of future cash flows equal to zero. The IRR indicates the annualized rate of return for a given investment—no matter how far into the future—and a given expected future cash flow.

Answered By: Alireza Date created: May 09, 2022

How does blood volume affect heart rate?

Asked By: Tom Date created: May 03, 2022

When heart rate or stroke volume increases, cardiac output is likely to increase also. Conversely, a decrease in heart rate or stroke volume can decrease cardiac output. What factors regulate increases and decreases in cardiac output? Factors affect cardiac output by changing heart rate and stroke volume.

Answered By: drAlberT Date created: May 06, 2022

What are the factors that affect osmosis?

Asked By: Evan Mulawski Date created: May 15, 2022

The factors affecting the rate of osmosis include:Pressure.Temperature.Surface Area.Water Potential.Concentration gradient.

Answered By: AKX Date created: May 18, 2022

Can pricing affect a business's image?

Asked By: spuder Date created: May 15, 2022

Can pricing affect a business's image? Yes; a business with low prices may have a discount image. When a business consistently uses low prices, it is usually thought of as a discount business.

Answered By: Tony Andrews Date created: May 18, 2022

Does credit score affect VA loan interest rate?

Asked By: Mike Date created: May 09, 2022

However, there are VA lenders that can require lower scores, down to 620 and even lower on a case-by-case basis. The difference that credit scores make on a VA loan affects an interest rate and any discount points associated with that rate. The higher the credit score, the better your rate and point combination may be.

Answered By: shakram02 Date created: May 09, 2022

Does 1 speeding ticket affect insurance rates?

Asked By: Michal Trojanowski Date created: May 18, 2022

According to a CarInsurance.com study, the average car insurance policy in California costs $1,783 a year. If you have a clean driving record, then most California companies offer a discount. ... One speeding ticket could remove that discount and increase your rate by 34%.

Answered By: MadProgrammer Date created: May 21, 2022

What factors affect the swap rate?

Asked By: udondan Date created: May 06, 2022

Previous research indicates that the main factors affecting interest rate swap spreads are the interest rate level, the slope of the yield curve, interest rate volatility, liquidity risk, and default risk (Lekkos and Milas (2001) , Fang and Muljono (2003), Asgharian and Karlsson (2008), Huang et al.

Answered By: Uri Date created: May 09, 2022

What are 4 factors that affect population growth?

Asked By: billynoah Date created: May 10, 2022

Population growth is based on four fundamental factors: birth rate, death rate, immigration, and emigration.

Answered By: endeavour Date created: May 11, 2022

What factors affect NPV?

Asked By: Achim Zeileis Date created: May 11, 2022

Factors Affecting Net Present Value. The major factors affecting present value are the timing of the expenditure (receipt) and the discount (interest) rate. The higher the discount rate, the lower the present value of an expenditure at a specified time in the future.

Answered By: Tim Down Date created: May 12, 2022

Related Question Answers

Lutz Prechelt

Professor

What are the 3 factors that affect the rate of dissolving?

They can be used to develop ideas relating to the factors which affect the rate of dissolving and the particle model explanation. The rate of dissolving depends on the surface area (solute in solid state), temperature and amount of stirring.

Teifion

Professor

What are the factors which affect photosynthesis?

Several factors can affect the rate of photosynthesis: light intensity. carbon dioxide concentration....Factors affecting photosynthesisthe rate of oxygen output.the rate of carbon dioxide uptake.the rate of carbohydrate (glucose) production.

Nathan Osman

Professor

Does marriage affect car insurance?

Generally, married couples get a lower car insurance rate than people who are single. If you just got married, you should call your insurance company because you might get a discount. ... To be sure, when compared with other non-driving variables, marriage has less impact on premium rates.

Drew Reese

Professor

Does school grades affect car insurance?

Good students can receive discounts. Young drivers who also earn good grades can be eligible for a dramatic discount on their insurance.

toydarian

Professor

Does your marital status affect car insurance?

Your marital status could influence your car insurance rates. Generally, married couples get a lower car insurance rate than people who are single. If you just got married, you should call your insurance company because you might get a discount.

frenchie

Professional

How do grades affect your insurance?

Most insurance companies offer a fixed percentage discount to full-time students who earn certain grades. The discount offered usually ranges from 10 to 20 percent. You can qualify by sending your insurance company your most recent report card or school transcript.

Michael Hoeller

Professional

What factors affect bond duration?

Certain factors can affect a bond's duration, including:Time to maturity: The longer the maturity, the higher the duration, and the greater the interest rate risk. ... Coupon rate: A bond's coupon rate is a key factor in calculation duration.

Strawberry

Professional

Do grades affect insurance?

Most insurance companies offer a fixed percentage discount to full-time students who earn certain grades.

The discount offered usually ranges from 10 to 20 percent.

You can qualify by sending your insurance company your most recent report card or school transcript..

geotheory

Professional

How does marriage affect car insurance?

Getting married, therefore, generally has a positive effect on your car insurance rates. Most auto insurance carriers offer a discount to married drivers. Even men under 25, who generally get stuck with the highest auto insurance premiums, receive a discount for being married.

Jeroen

User

What factors affect your home loan interest rate?

Major Factors that Influence your Home Loan Interest Rate and EMIMCLR Rates.Type of Interest.Loan-to-Value (LTV) Ratio.Credit Score.Location of the Property.Job Profile.Tenure of the Loan.

Tyler McHenry

User

What factors affect nominal interest rates?

Such an increase owes to two factors: the real interest rate paid by your investment account, and the overall rate of inflation. When you combine those two factors, you get what's known as the nominal interest rate.

Zain

User

How do interest rates affect discount rate?

In part, interest rates represent the cost of borrowing money. ... More immediate impacts are felt from a high discount rate. Loans are more expensive, and borrowers have to work to pay off loans more quickly.

Chris Saxon

User

How does discount affect consumer behavior?

According to the economic effects of price discounts, a price discount provides a monetary gain, an incentive to encourage consumers to purchase the product. Consumers perceive a higher level of savings for a product when a higher price discount is provided, and this relationship was confirmed by many previous studies.

Péter Török

Guest

How does discount affect profit?

Your Profit Margin Takes a Hit Your margins are higher when selling a product or service at full price, compared to selling at a discount. The profit margin you lose through discounting will still have to be made up with future opportunities, so you'll have to sell more to get back the revenue lost.

TheIceBear

Guest

How does the discount rate affect interest rates?

Setting a high discount rate tends to have the effect of raising other interest rates in the economy since it represents the cost of borrowing money for most major commercial banks and other depository institutions. In part, interest rates represent the cost of borrowing money.

I Hate Lazy

Guest

How does recession affect aggregate demand and supply?

With a fall in aggregate demand and lower economic growth, this puts downward pressure on prices. In a recession, you are more likely to see shops selling at a discount to sell unsold goods. Therefore, we tend to get a lower inflation rate.

Lalit Fauzdar

Guest

What are the 3 main government tools that affect supply?

The Federal Reserve's three instruments of monetary policy are open market operations, the discount rate and reserve requirements. Open market operations involve the buying and selling of government securities.

Christian Oudard

Guest

What factors affect the rate of corrosion?

There are several factors influencing the rate of corrosion including diffusion, temperature, conductivity, type of ions, pH value and electrochemical potential.

Danziger

Guest

What factors affect video quality?

The factors that determine the quality of an uncompressed videos are: video resolution, video frame rate and macroblock. 2. The factors that decide a compressed video quality include: Video resolution, frame rate, bit rate, codec, bit control mode (macroblock), Bit depth (color depth).

Ash Wilson

Guest

What factors affect rate constant?

The rate equation shows the effect of changing the reactant concentrations on the rate of the reaction. All other factors affecting the rate—temperature and catalyst presence, for example—are included in the rate constant, which is only constant if the only change is in the concentration of the reactants.

hadley

Guest

How does inflation affect common stock?

Because inflation made the “discount rate” higher, the value today of the future $10,000 was reduced. The same thing happens to stocks. Since a stock's price is just the risk-adjusted present value of the company's future cash flows, a rise in inflation will cause it to drop as well.

Hans Olsson

Guest

What are the five environmental factors that affect photosynthesis?

Several factors can affect the rate of photosynthesis: light intensity. carbon dioxide concentration. temperature....Factors affecting photosynthesisthe rate of oxygen output.the rate of carbon dioxide uptake.the rate of carbohydrate (glucose) production.

Rodrigo Rodrigues

Guest

What factors affect rate of photosynthesis?

Several factors can affect the rate of photosynthesis: light intensity. carbon dioxide concentration. temperature....These include:the rate of oxygen output.the rate of carbon dioxide uptake.the rate of carbohydrate (glucose) production.

Mike Müller

Guest

What are the 4 factors that affect reaction rate?

There are four main factors that can affect the reaction rate of a chemical reaction:Reactant concentration. Increasing the concentration of one or more reactants will often increase the rate of reaction. ... Physical state of the reactants and surface area. ... Temperature. ... Presence of a catalyst.

Mitch Wheat

Guest

What factors affect glow stick reaction?

Glow Sticks and the Rate of Chemical Reaction Several factors affect the rate of a chemical reaction, including temperature, concentration of reactants, and the presence of other chemicals.

M. Deinum

Guest

What factors affect glow sticks?

Glow Sticks and the Rate of Chemical Reaction This means luminescence or light is produced as the result of a chemical reaction. Several factors affect the rate of a chemical reaction, including temperature, concentration of reactants, and the presence of other chemicals.

Pavlo

Guest

What factors affect the rate constant?

The temperature and concentration are factors that affect the magnitude. An increase in temperature increases the rate constant and hence the rate. An increase in concentration increases the rate but not the rate constant. the rate of a reaction depends on the rate constant and concentration.

stdcall

Guest

Does level affect catch rate?

What's more (thanks @Kat for pointing out), the combination of the Base Capture Rate and the Pokemon's level being the only thing that defines a Pokemon's catch rate, two trainers encountering the same kind of Pokemon with the same Pokemon will have the same catch rate, no matter what the levels of the two trainers are ...

Praetorian

Guest

What are the five factors that affect photosynthesis?

Several factors can affect the rate of photosynthesis: light intensity. temperature....Factors affecting photosynthesisthe rate of oxygen output.the rate of carbon dioxide uptake.the rate of carbohydrate (glucose) production.

Parfait

Guest

What factors affect the rate of crystallization?

Both the rate of formation of nuclei and the rate of crystallization are affected by the nature of the crystallizing substance, the concentration, the temperature, agitation, and the impurities present in the solution.

Inanc Gumus

Guest

Does breakdown affect no claims bonus?

You also won't lose your no claim discount if you need to only make a claim for emergency medical treatment, windscreen damage, breakdown or motor legal expenses. In certain circumstances you can make a claim and it won't affect your no claim discount.

R Sahu

Guest

Do grades affect your car insurance?

Young drivers who also receive good grades can be eligible for a dramatic discount on their insurance. Studies have shown that a student who receives As and Bs is more likely to be a better driver than a student who receives Cs and Ds. This discount does vary by company, and in fact, may not even be offered by some.

Axeman

Guest

How does discount rate affect inflation?

The Fed raises the discount rate when it wants all interest rates to rise—known as contractionary monetary policy—it is used by the central banks to fight inflation. This policy reduces the money supply, slows lending, and therefore slows economic growth.

blowdart

Guest

How does discount rate affect interest rates?

Setting a high discount rate tends to have the effect of raising other interest rates in the economy since it represents the cost of borrowing money for most major commercial banks and other depository institutions. ... When too few actors want to save money, banks entice them with higher interest rates.

Jay McDoniel

Guest

How does inflation affect discount rate?

The basic pricinple is to discount cash flows which contain the effect of inflation (i.e.

nominal cash flows) using nominal discount rate and discount cash flows with do not contain the effect of inflation (i.e.

real cash flows) using real discount rate.

Both of these methods result in the same net present value..

alexn

Guest

How does Prime Rate affect APR?

When the prime rate changes, the variable rate changes as well. ... Your credit card APR is subject to what's essentially a trickle-down effect when rates rise. The Federal Reserve increases the federal funds rate, which causes the prime rate to increase, which means your credit card APR increases.

Aaron Hall

Guest

How does the discount rate affect inflation?

The Fed raises the discount rate when it wants all interest rates to rise—known as contractionary monetary policy—it is used by the central banks to fight inflation.

This policy reduces the money supply, slows lending, and therefore slows economic growth..

trsvchn

Guest

How does the discount rate affect the prime rate?

As a rule of thumb, the prime rate always adjusts based on how the Fed moves the discount rate. When the discount rate goes up, the prime rate goes up as well. This produces higher mortgage interest rates, which can slow the demand for new loans and cool the housing market.

Chad Bingham

Guest

What can affect respiratory rate?

The most common factors that can affect your measured respiratory rate include:emotional state.physical fitness.internal temperature.disease and health status.

Matthew Crumley

Guest

What are the factors that affect breathing rate?

People who had a higher breathing rate returned to the hospital more often than those with a normal breathing rate. There are various factors that affect a person's breathing rate, including injuries, exercise, emotion, mood, as well as a range of medical conditions.

Paul Sonier

Guest

How does OFS affect share price?

Retail investors are generally offered a discount on the floor price when they buy shares through OFS. The discount is around the range of 5% in these offerings. The discounted price is one of the key benefits of investing through OFS for retail investors. The entire process of OFS is a system based bidding platform.

Mahmoud Zalt

Guest

Will one ticket affect my insurance?

If you have a clean driving record, then most California companies offer a discount. ... One speeding ticket could remove that discount and increase your rate by 34%. That is a $605 increase a year, or $1,815 over three years; companies usually surcharge for three to five years.