Don't Be Afraid to Use a High Discount Rate in Your DCF for Early-Stage Firms.

This article discusses the use of a high discount rate in determining the enterprise value of early-stage companies. The author presents a case study of a biotechnology company with no historical revenues and negative cash flows. Due to the uncertainties surrounding the company's future, a high discount rate is recommended to account for the risk. The article also provides guidance on selecting an appropriate discount rate based on the stage of development of the company. [Extracted from the article]