EPV: Earnings power value, calculated by discounting normalized earnings at cost of capital
NAV: Net asset value, adjusted to replacement value
IV: Intrinsic value, calculated from both EPV & NAV
EP: Entry price, 2/3 of IV
Kc: cost of capital, weighted average of Kd & Ke
Ke: ERP + Kd, cost of equity
Kd: RFR + DRP, cost of debt
ERP: Equity risk premium, determined by intrinsic business risk + capital structure
DRP: Debt risk premium, determined by intrinsic business risk + capital structure
RFR: Risk free rate, using 1 – 10 years treasury note yields, depending on one’s fund usage duration, normally, I’d pick geometrically averaged historical 10-year treasury note yield
