Determination Of Discount Rate In The Evaluation Of The Value Of Eauity

With the rapid development of China’s market economy, the assessment of the value of enterprises is becoming more and more important. The value of equity in the enterprise value is the very focus of attention of the related personnel. However, due to China’s market economy’s time is relatively short, and the reference to related objects is relatively small, so the application data related issues. These resulte that the technology applicated well in western countries is not well applicated in our country. We know that there are a lot of methods to evaluate enterprise value,and the use of proceeds in these methods is the most common method. However, the income approach is on the basis of the enterprise future earnings, and therefore it produces a lot of subjective factors. The discount rate which is an important parameter of the income approach becomes particularly important. Generally with the use of the income method of assessment,we well applie the capital asset pricing model. However in the application of the model there are some controversy in related technologies and the selection of related parameters.This paper put forward some views and suggestions on the problems using the income method to determine the discount rate when using the capital asset pricing model and how to determine the the discount rate and the equity value more accurately.In this paper, the first part is the introduction, which mainly introduce the research background,significance and the domestic and foreign research results. The second part is the main part, respectively, from thequalitative and quantitative point of view explains some ideas, and puts forward the reasonable optimization of the method for selecting parameters.. Then based on the capital asset pricing model, it proposes the use of iterative method to determine the discount rate and the value of equity. And it analysis and comparises the advantages and disadvantages of three kinds of iterative method, and ultimately it determine to use the sequence withperiod. The third part is the application of case analysis,which in the form of case introduces method to determine the discount rate in the evaluation of the value of equity.