Excel: Calculating Terminal Value using Gordon Growth Model
Relatively new to building DCF's and was looking for advice on how I would calculate the Terminal value using the Gordon Growth Model.
I have the company's WACC, growth rate, and final year FCF that I am projecting. Would appreciate any help with what function/formula I would use to calculate this on Excel.
Pretty sure it's your last year cash flow divided by (WACC - Long term growth rate). The larger your growth rate, the smaller the denominator, and thus the larger the terminal value.
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