DEFINING A DISCOUNT RATE BZ USING THE "BUILD UP APPROACH" METHOD AS ONE OF THE STEP IN THE METHOD OF DISCOUNTING FINANCIAL FLOWS

In the work, the process of establishing a discount rate, by using the ''Build up approach'' has been considered. The paper has such a conception as to present the necessity of establishing the discount rate, being one of the steps in the method of discounting financial flows which is used in evaluating the capital value of an enterprize. This is just one of the methods that can be used by an enterprize, depending on its situation and position at the market. The method itself has its own necessary phases which have been presented in this paper and which have been followed by numerical examples.

Key words: Discount rate, capital value evaluation, the method of financial flows discounting.