#123Terminal Growth Rate Exceeds the Discount Rate
dcf.hardDCF
1A1: Terminal Year FCF 209.9
2A2: WACC 9.5%
3A3: Terminal Growth Rate 11.0%
4A4: Terminal Value =A1*(1+A3)/(A2-A3)
5A5: PV of Terminal Value =A4/(1+A2)^5
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#123PracticeHard18 min · 200 XP
Terminal Growth Rate Exceeds the Discount Rate
A perpetuity-growth terminal value calculation returns a large negative number, which flips the sign of the entire valuation.
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