Definition for : Terminal value

When a company is Valued using the DCF method, the final, or terminal, Value of the company at the end of the explicit horizon is estimated. Terminal Value can be derived either from Capital employed, reValued or not, or by using the multiples of operating balances, or by Discounting to infinity the normative cash flows.

(See Chapter 32 Capital structure and the theory of perfect capital markets of the Vernimmen)

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