The Risk-Adjusted Discount Rate Used to Compute the Present Value

question 50

Short Answer

The risk-adjusted discount rate used to compute the present value of all the projected free cash flows for common equity shareholders equals the _______________________________________________________.

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Definitions:

Intervening Cause

A legal term for an event that occurs after a party's initial act of negligence and contributes to a harmful event without breaking the causal link between the negligent act and the harm.

Reasonable Person Standard

A legal standard used to determine how an average person with ordinary prudence would act in certain circumstances.

Plaintiff

The party that initiates a lawsuit by filing a complaint against the defendant for legal redress.

Negligence

A failure to exercise the level of care that someone of ordinary prudence would have exercised in similar circumstances, leading to harm or damage.