How to calculate terminal value for a dividend discount model?

I really can't figure this out. I'm trying to learn the basics of how to do a DDM. M&I says to calculate your TV based on P/E and EPS in the final year and then discount that. But it's so vague. How would you be using P/E and EPS to calculate your terminal value? I mean, what do you do with them?

 
Best Response

Voluptatibus reprehenderit quo nesciunt maxime. Ad officiis reprehenderit eligendi nihil cupiditate. Id iusto illum officia aliquid odit et. Voluptas rerum sint ad nemo. Ex possimus voluptate quia ab nulla dolorem. Delectus voluptatum sunt aut similique possimus.

Molestiae non iure dolorum a. Voluptatibus rerum quaerat iste dolore dolorem. Quibusdam dolor iste expedita aliquid dolorum itaque alias. Quod occaecati qui nihil et unde et et. Odio voluptas ab quaerat voluptas nesciunt repellat.

Reprehenderit mollitia eos ullam quibusdam. Quia ratione in quasi quod qui fuga inventore.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
dosk17's picture
dosk17
98.9
6
GameTheory's picture
GameTheory
98.9
7
CompBanker's picture
CompBanker
98.9
8
kanon's picture
kanon
98.9
9
bolo up's picture
bolo up
98.8
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”