iVALUE utilizes a discounted cash flow (DCF) model as a valuation method to determine a company's intrinsic value. iVALUE, through a DCF model, uses a company's free cash flow and the weighted average cost of capital (WACC). WACC accounts for the time value of money and then discounts all its future cash flow back to the present day.

The weighted-average cost of capital is the expected rate of return that investors want to earn that's above the company's cost of capital. A company raises capital funding by issuing debt such as bonds and equity or stock shares. The DCF model also estimates the future revenue streams that might be received from a project or investment in a company. Ideally, the rate of return and intrinsic value should be above the company's cost of capital.

The future cash flows are discounted meaning the risk-free rate of return that could be earned instead of pursuing the project or investment is factored into the equation. In other words, the return on the investment must be greater than the risk-free rate. Otherwise, the project wouldn't be worth pursuing since there might be a risk of a loss. A U.S. Treasury yield is typically used as the risk-free rate, which can also be called the discount rate.