Do What Warren Buffett Does: Achieve Winning Results Using His Proven Successful Strategies (Investing for Beginners Book 3) by Gruner Mark

Author:Gruner, Mark [Gruner, Mark]
Language: eng
Format: epub
Published: 2020-10-01T00:00:00+00:00

Chapter 9 - Discount Rates

“Time is the friend of the wonderful company, the enemy of the mediocre.”

- Warrent Buffett

T he choosing of a good discount rate to use is quite a critical topic when estimating the value of a company. You should know what is a reasonable discount rate and what is unreasonable. If you tried to do your estimates with a discount rate of 1% review what happens to your calculations. You should see your valuations grow tremendously. The reason for this is that you are choosing a discount rate that is far too low. The discount rate should be closer to 8% to 10%.

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