The scope of discount factors used in DCF valuation in valuation practice[Povaha diskontních faktorů používaných při oceňování metodami DCF v oceňovací praxi]

The paper describes methodological issues related to the construction of the required rate of return (WACC) for the purpose of valuation business unit using DCF entity and DCF equity methods. There is a discrepancy between the approaches of valuation practice in constructing the required rate of return on equity using the SML model using the stock market index as the so-called market portfolio versus using the market portfolio based on the theoretical CAPM model. Furthermore, the issue of identifying the cost of equity of floating rate foreign funds. The paper draws attention to the fact that DCF valuation methods are by their nature highly subjective valuation procedures, among other things due to the construction of discount factors (required rate of return) when valuing a business unit using DCF-based valuation procedures.