Terminal Value Definition & Application Wiki
Terminal Value Definition & Application Wiki
Last Updated by WikiWealth
Short Definition
TV = Terminal Value
In finance, the terminal value (continuing value or horizon value) of a security is the present value at a future point in time of all future cash flows when we expect stable growth rate forever. It is most often used in multi-stage discounted cash flow analysis, and allows for the limitation of cash flow projections to a several-year period. Forecasting results beyond such a period is impractical and exposes such projections to a variety of risks limiting their validity, primarily the great uncertainty involved in predicting industry and macroeconomic conditions beyond a few years.
Long Definition
See Dictionary Terms
- Fair Value
- Free Cash Flow
- Weight Average Cost of Capital (WACC)
- Value Investing
- Risk Free Rate
- Long Term Growth Rate
See Academic Resources
- Fair Values
- Potential Returns
- WACC Discount Rate Model
- Private Equity Discount Rate
- WACC Calculator
- Beta Calculator
- Adv Cash Flow Template
- Basic Cash Flow Model
- Warren Buffett Model
- 1 Stage FCFF
- 2 Stage FCFF
- 1 Stage FCFE
- 2 Stage FCFE
- 3 Stage FCFE
- Dividend Discount Model
Source: http://en.wikipedia.org/wiki/Terminal_value_(finance)
page revision: 13, last edited: 07 Sep 2010 20:50
