Discounted cash flow with a terminal value calculator
And how much of the answer that one assumption is.
Interactive: discounted cash flow with a terminal valueMedium
- PV of forecast years
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- PV of terminal value
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- Enterprise value
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- Terminal share
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- Implied multiple
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- Health warning
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Watch the terminal share. On these defaults most of the value sits beyond year ten, governed by one perpetual growth rate — move it from 2.5% to 3.5% and the answer changes more than a decade of careful forecasting ever could. Push terminal growth up to the discount rate and the model correctly refuses: a company cannot outgrow the cost of capital forever.
The idea behind it
This calculator belongs to Valuation & Cost of Capital, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.
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