Calculator · Terminal value
Terminal value calculator
Check that a perpetuity-growth terminal value is consistent: growth against the risk-free rate, reinvestment against growth and return on capital, and the implied exit multiple against the industry.
How the terminal value check works
The terminal value often carries most of a DCF value, so its assumptions must agree with each other. The calculator derives the reinvestment rate that a stable growth rate requires at the return on new capital you assume, computes the Gordon growth terminal value, and shows the exit EV/EBITDA multiple it implies next to the industry multiple.
Growth above the risk-free rate is flagged, following Damodaran's practice (IVS sets no cap), and a return on new capital far from the cost of capital is questioned. IVS 103 paras A20.20 to A20.23 cover terminal values.
Related: Equity bridge calculator · Multiples cross-check · WACC calculator · Model notes
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