Cost of capital
What a discount rate is pricing, where each of its inputs is read from, and which of them are estimates you are responsible for rather than figures anyone filed.
A discount rate is the input a valuation is most sensitive to and the one with the least documentation behind it. This course is about closing that gap: not by finding the right number, because there is not one, but by knowing exactly which part of your rate came out of a filing and which part came out of you.
Two lessons. The first is what the rate is pricing, which is the thing that makes every later decision obvious. The second is where each of the five inputs to a weighted average cost of capital is actually read from, line by line, and what to do about the ones that are not readable anywhere.
Both are short and both assume you can read a balance sheet. Neither will tell you what rate to use. That is the point: a rate somebody else picked is an assumption you cannot defend, and defending it is the entire job.
The calculator and these lessons are free and need no account. ValueScreener is the subscription they come out of, and it is mentioned here once so you know what this is, not because reading the course requires it.
Related
- WACC calculator is the calculator this course is written around, with the working shown at every step.
- The two numbers that move a DCF most are the two you cannot look up shows what a one-point change in the discount rate is actually worth in a valuation.
Teaching material, not advice. See our methodology for how the product reads a filing and what it refuses to compute.