The discount factor of a company is the rate of return that a capital expenditure project must meet to be accepted. It is used to calculate the net present value of future cash flows from a ...

Discover how the Gordon Growth Model calculates stock value using constant dividend growth, including key inputs and examples. It's ideal for stable dividend-paying firms.

The biggest danger we see is a rising discount factor or the incremental change in the denominator of the value equation which we define as the present value of future free cash flows.