discount factor

You use the formula (which is given at the top of the discount tables). the 1 year factor at 4.2% is 1/1.042 The 2 year factor is (1/1.042)^2 The 3 year factor is (1/1.042)^3

Thank you sir. One thing more I wanted to ask while calculating beta why some time in question they use %of debt and equity and sometime the total market value. Many thanks.

I assume you are meaning when we are calculating an asset beta from an equity beta (or vice versa). It depends how the information is given - if you are given the total market values then use them, if you are given the gearing as a percentage then use them. It makes no difference because in the formula it is effectively a ratio.

Thank you sir.

You are welcome :-)