Valuation query

I know this may not directly be related to the topics taught by the CFA… but I read somewhere ( an IBD training manual frmo a BB) that it is more appropriate to use year specific discount rates respective to the years as opposed to using one discount rate throughout.

I can understand theoretically why you would use a “2-year zero” for discounting cash flows received in 2nd year etc… but why is it conventional to use a single discount rate throughout?


I think it’s because we assume that the opportunity cost of the funds doesn’t change year on year (i.e. risk free rate, beta, risk premiums are constant).