Discounting cash flows
I would like to pick your brains on discounting concept. Assuming we are discounting cash flows over a 5 year period using a discount factor, are we supposed to adjust the discount factor with growth assumption when growth has already been factored in the cash flows (adjusting both rate and cash flow) or we only adjust the cash flows?
Also, in deciding what risk free rate to use as a discount factor, which one would be preferable, a yield on a 91 day treasury bill or a 364 day treasury bill (assuming we have decided to use treasury bill yield as discount factor)? And to throw a spanner into the whole thing, assuming we are doing the analysis as at 31.12.2018 and the treasury has issued new treasury notes (say in February 2019) of 2 years and 3 years with yields of 17% and 14%, respectively, can we used the yields on these subsequently issued instruments for our analysis as at 31.12.18
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