Asset values are computed using the discounted cash flow approach and the following inputs:
-
A forecast of the future payouts to the owners of the asset (dividends and shareholder loan repayments and interest, or senior debt service).
-
A term structure of risk-free rates in the relevant market on the valuation date (quarter- or month-end) and at the relevant horizon (duration).
-
An equity risk premia or debt credit spread.
As long as sufficient information about the expected cash flows to equity or debt holders can be obtained or estimated, at any time 
we have:
for primary or secondary investment 
in asset 
, paying 
until time 
. 
is the discount rate that the infrastructure company should be discounted at for time .
Here, 
which is a combination of the term structure of risk-free rates 
in each period until investment horizon and the risk premia 
estimated for asset .
As described, 
is a company-specific risk-premia, computed as the combination of asset i's risk factor exposures at the time of valuation or 
and the market price of each risk factor 
estimated from observable market prices.