CAIRN 2014 Report Published!, page-20

need to add a discount to any valuation made for risk and the time value of money.
Picking a risk deduction is not easy, nor an exact science

One simple way of getting a start /working it out - take current market valuation and determine the % reduction from your own current valuation.

If things go well, the risk will reduce over time, and MV will slowly converge (nearer your valuation)

It is not an exact science though,

Take FMG for example,
currently various brokers have valuation somewhere between
$1.00 - Hines, CBA
and $3.80 - Bell Potter

and these are the pro's at work - they see the future risks differently (in this case funding the money to repay debt for FMG that is soon due)...

Now if a purchase is in the air (such as iin recently) dynamics change again- the willingness to pay above odds increases, and those in the market will try to capture some of that willingness....