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Following our specialized colleagues replies and answers.
There is no indisputable discount rate: a discount rate is a subjective appreciation of the risk of the flows of the company.
The formula for risk premium, sometimes referred to as default risk premium, is the return on an investment minus the return that would be earned on a risk free investment. The risk premium is the amount that an investor would like to earn for the risk involved with a particular investment.
To calculate the beta of a security, the covariance between the return of the security and the return of market must be known, as well as the variance of the market returns. ... For example, variance is used in measuring the volatility of an individual stock's price over time.
