What Is Terminal Value (TV)?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

Terminal Value or TV is the value of any investment at the end of the investment period. This will usually assume a constant interest rate for the period.

The calculation for Terminal Value is as follows:

  • Principal / (1 + Interest Rate)^Time

Terminal Value is used to calculate what the final outcome of an investment will be and how much it will be worth.

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Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.