What is risk adjusted discount rate, Financial Management

Assignment Help:

Q. What is risk adjusted discount rate?

The risk adjusted discount rate includes two rates viz

(i) Risk-free rate: - Risk free rate is the usual rate or the usual discount rate that takes care of time element and

(ii) Risk Premium Rate: - Risk Premium Rate is the excess rate or extra rate that takes care of the risk factor.

Therefore the risk adjusted discount rate is the usual or normal discount rate for the time factor plus the extra or additional discount rate.


Related Discussions:- What is risk adjusted discount rate

Managing finance, Read the journal article Lafferty, B. A., & Hult, G. T. M...

Read the journal article Lafferty, B. A., & Hult, G. T. M. (2001) ‘A synthesis of contemporary market orientation perspectives’, European Journal of Marketing, 35 (1/2), pp. 92–109

Explain the term- authorised and paid-up share capital, Explain the term- A...

Explain the term- Authorised and Paid-up Share Capital Number of shares of stock provided for in Articles of Association of a company is the authorized share capital. This figu

Capital budgeting case study, RWE Enterprises is a small manufacturer in Ad...

RWE Enterprises is a small manufacturer in Adelaide South Australia, feed suppliments for cattle. New production line NPV, Payback period and discounted payback period

Stakeholder vs shareholder approach, QUESTION 1 (a) What do you underst...

QUESTION 1 (a) What do you understand by the term Civil Society Organisations? (b) Distinguish between sectional and promotional groups. Give examples to support your answer

CVP analysis, What is the meaning of Breakeven point?

What is the meaning of Breakeven point?

Manage an assignment, Manage a project or clearly defined piece of work fro...

Manage a project or clearly defined piece of work from beginning to end. This may include setting up a budgetary system.

Evaluate net realisable value of assets, Q. Evaluate Net realisable value o...

Q. Evaluate Net realisable value of assets? Valuation (i) Method 1 - Net assets according to the statement of financial position Value = $295000 Reservation N

Debt financing in capital structure, Net Income approach says that a raise ...

Net Income approach says that a raise in the proportion of debt financing in capital structure results in an increase in the proportion of a cheaper source of funds. This in turn r

What does high inflation have on the value of a business, What impact does ...

What impact does high inflation have on the value of a business? Besides causing distortion (as it unequally affects all goods and services), inflation enhances the uncertainty

Calculate average annual return, Q. Calculate Average Annual Return? An...

Q. Calculate Average Annual Return? An investor buys a bond in 1978 maturity in 1980 at Rs.900. It has a maturity value of 10 years and par value of Rs. 1000. It fetches RS.90

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd