One of the calcs that I always do, when evaluating stocks, is discounted cash flow or earnings per share. A dollar tomorrow is not equal to a dollar today due to factors like inflation or opportunity cost so I must discount tomorrow's dollar.
For example:
If I got paid $1 a year from now and my discount rate was 10%, that dollar would be worth ($1/1.10) or $0.91 in today's dollars.
If I got paid $1 two years from now and my discount rate was 10%, that dollar would be worth ($1/(1.10*1.10)) or $0.83 in today's dollars.
But what discount rate to use?
What many people use is the rate of a 100% "safe" investment like a government treasury bill plus a buffer for any additional risk. That, to me, is also an airy fairy number. Sure, the government treasury bill number is solid but the risk number is one that can be manipulated (and we try to take as much manipulation out of our numbers as possible, don't we?).
What I use for my personal is similar to the rate I use in corporate calculations (for new product launches). That is, I use my target rate of return (12% - when I first started out investing it was 8%). That's the rate I'm happy to receive. Anything lower and I get a little grumpy grump face.
Btw… in corporate, the target rate of return is almost always north of 10%.