Abstract—This study attempts to link the discount rate of the
intangible assets with patent rights, computer softwares,
customer relations, trademarks, other intangible assets, and
goodwill. By requiring the weighted average capital cost equal
to the weighted average return on assets, the discount rate of the
intangible assets can be estimated with the return on intangible
assets. Since the characteristics of industry dominate the
performance of intangible assets and Taiwan's semiconductor
industry ranks as a global leadership, our study will focus on the
semiconductor industry of Taiwan. The empirical results reveal
that patent rights, computer softwares, other intangile assets,
and goodwill are significantly relevant to the discount rate of the
intangible assets in Taiwan’s semiconductor industry. Our
findings provide deeply insights into the valuations of intangible
assets.
Index Terms—Discount rate, valuation of intangible assets,
weighted average cost of capital, weighted average return on
assets.
The authors are with the Department of Accounting, Chaoyang University
of Technology, Taiwan (Corresponding author: Ting-Yu Chen; e-mail:
mclu@cyut.edu.tw, juichiencheno@gmail.com).
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Cite: Ming-Che Lu and Ting-Yu Chen, "The Discount Rate for The Valuations of Intangible Assets — Evidence from Taiwan’s Semiconductor Industry," International Journal of Trade, Economics and Finance vol.13, no.1, pp. 7-11, 2022.
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