The terminal value, two ways calculator

Interactive: the terminal value, two waysHard

There are two ways to end a discounted cash flow and they rarely agree. Each one implies the other, and reading off what it implies is the only cross-check the method has.

From perpetuity growth

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From the exit multiple

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Multiple the growth implies

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Growth the multiple implies

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Gap between the two

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Reading

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Both ends are undiscounted here — they are values at the end of the forecast, not today. A growth rate above the long-run growth of the economy the business sits in implies it eventually becomes all of it. Information and education only. Not advice, not a valuation, and not a quote for anything.