How would you compute the terminal value in a DCF?
- Apply the current trading multiple to today's EBITDA, since that captures the market's forward view
- Multiply the final-year FCF by the number of remaining years the company is expected to operate
- Either Gordon growth (FCF x (1+g) / (WACC - g)) or an exit multiple on the terminal-year metric
- Divide the final-year FCF by WACC alone, ignoring growth since it cancels out in the long run
- Sum the projected free cash flows over the explicit forecast and treat that total as the terminal value
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