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Dictionary by pitch.dog
Valuation methods & enterprise value · Core

Discount rate

Also called: required return

ELI5

Rate used to convert future cash flows into present value, reflecting time and risk under the model.

Used in conversation

“Compare discount rate with the same cohort and period before drawing a conclusion.”

Pitch context

You will see “Discount rate” in financial models, budgets, board packs and investor materials when the discussion reaches valuation methods & enterprise value.

Why it matters: In valuation methods & enterprise value, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

  • Discount rateThe same visible label “Discount rate” names different concepts.
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Sources & evidence · 5

Direct term-level sources and supporting source families.