Discount Rate

A discount rate is the annual return used to turn future cash into today's money: a payment due in n years is worth payment / (1 + r)^n now. In a valuation it is the return demanded for waiting and for the risk that the cash never arrives, so a higher rate always means a lower present value.

A DCF applies the rate to every forecast year and to the terminal value, which is why it moves the answer so far. In the fair-value tool's default case, cutting the rate from 9% to 8% lifts the value per share by 19.9%, and raising it to 10% lowers it by 14.5%. The rate is an assumption you choose, not a figure any filing reports.

Which rate fits depends on whose cash flow is being discounted. Cash flow to shareholders is discounted at the cost of equity; cash flow to every provider of capital is discounted at WACC, with debt subtracted afterwards. The fair-value tool treats free cash flow as cash flow to equity and divides by shares directly, a shortcut it states on the page.