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What model do you use to price assets?

Answer

At the heart of the infraMetrics® data and analytics solutions is a Discounted Cash Flow Model. Each month, asset prices are computed using discount rates, which are calibrated from company-level information to forecast dividend payouts and shareholder loan repayments, alongside a factor model of expected returns is calibrated to reflect the latest market price of risk (i.e. risk premia). The prices used in the index are computed directly from available cash flow and market data, and this price data is then used to compute the asset-level performance and risk metrics you see in the infraMetrics® platform.

Things to consider

You can read a more detailed explanation of our asset pricing model on our Documentation site.

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