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1.5.1 Asset Values (Prices)

MAY 2024

Asset values are computed using the discounted cash flow approach and the following inputs: 

As long as sufficient information about the expected cash flows to equity or debt holders can be obtained or estimated, at any time  we have:

 
for primary or secondary investment  in asset , paying  until time .  is the discount rates that the infrastructure company should be discounted at for time.

Here,  which is is a combination of the term structure of risk-free rates in each period   until investment horizon  and the risk premia  estimated for asset .

As described here,  is a company specific risk-premia, computed as the combination of asset 's risk factor exposures at the time of valuation or  and the market price of each risk factor   estimated from observable market prices. 


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