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@mikedsjr Damodaran's implied equity risk premium is about 5%. Add that to the risk free rate of 3% and you get 8% cost of equity (or discount rate).

@dustwake That's fair. But if it's undervalued by 13% with an 8% COE and fairly valued using 9%, you're really not going to notice a difference in returns in the long run. It's all guess work anyways. I'd focus more on improving revenue and margin forecasts before I started fretting about...

@dustwake I'd say 8% is about right at the market level. If you're going to go by Damodaran's methodology of multiplying the market risk premium by the company's beta (Google beta is 1.06), then 8% DR is perfectly fine. One could argue for 9% probably, but you're splitting hairs at that point.