How much is the industry discount rate at SANDALS for flight attendants?

Valution and Discount rate?

• About valuation in real life, what is the actual discount rate? I know the discount rate is the required return to investors and the interest rate of debt (WACC) But how is this paid out in real life? Dividend to the investors? Interest payments to banks? One should use the free cash flow and the interest has already been paid out to banks when calculating the free cash flow? What if you use the discounted dividend model : V = d/(r-g). How does the investor get paid in real life? Dividend right? why discount dividend? I understand that time value of money is very important, but that is only inflation and increase in prices. Discount rate is also risk, right? how is this in real life if the project goes smooth? Thanks for the help! Cheers!

• Answer:

  Hey Jorgen- This is not an area of expertise for me, but I just visited a site the other day that likely will have an answer for you. Go and check out : http://www.startupinfo.com/ - The site seems to be run by a very well known business / m&a attorney out of San Diego. Figuring out discount rates during a valuation is an art. Here is the article from the site that caught my attention on valuations: http://www.startupinfo.com/blog/pre-money-valuation-what-is-it-how-important-is-it-and-how-can-i-increase-it/ Good luck and cheers!