I received this question recently and wondered if I answered correctly.
For a media company, for example, should it be a 5 or 10 year forecast and what determines it?
I know that the shorter the years, the more value in the terminal value. But in what instances is it better to have more of your assumptions lie in the terminal value ?
| +148 | ONLY THESE BANKS OR YOU STRUCK OUT | 38 | 13h |
| +111 | IB Energy Drink Tier List / Ranking | 73 | 1d |
| +61 | Firm Thinks I'm Lying About Offer | 19 | 16h |
| +53 | Indiana University Fraternity Pipelines | 32 | 13h |
| +51 | Feedback for internship first desk at IBD BB - personal fit, "don't be too confident" | 29 | 2d |
| +39 | Stay at Weak Dealflow Team or Lateral? | 12 | 21h |
| +36 | Rogo AI | 14 | 11h |
| +34 | Elite Boutique interview questions | 8 | 1d |
| +30 | Suspended for a Year | 11 | 14h |
| +23 | 1st Half 2026 (1H26) RX IB & RX Co. Rankings | 14 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Not sure about specifically media, but usually if a company has stable cash flows 5 years is good. If the company is growing quickly or does not have stable cash flows 10 years is best so that your last few years end in stability.
its whatever your md tells you
You want to make sure revenue growth % has leveled out at a lower number by the time you calculate TV, so if the revenue growth is really high at the beginning of projections you may need to model out more years for a better revenue glide path. Going into TV with a growth rate that is too high will overstate the TV and affect your valuation.
You want to achieve a level of maturity/stability within your projection period. Often cannot do that with just 5 years
In general: if the target itself AND ITS MARKET is stable, you can stop the explicit forecast. If the market or your share is growing, keep forecasting. If the company is highly profitable and barriers to entry are not huge, keep forecasting and implement the impact of increasing competition (marketing spend, capex, marings, etc).
Short cut: use a multi stage terminal value based on value driver method instead of gordon growth.
Officiis quos corrupti iure commodi dignissimos. Eum repellendus dolorem ut quaerat mollitia amet adipisci recusandae. Quaerat assumenda fuga sapiente qui provident saepe. Est est magnam voluptatem vel delectus ducimus quia vitae. Sed deserunt sint voluptas dignissimos iure qui aut. Quo eius et est odit. Qui dolore quos dicta qui placeat culpa.
Voluptatem optio quos non qui reprehenderit. Quod ratione saepe quod omnis voluptas. Distinctio dolorum dolor enim. Natus magnam voluptatum earum pariatur doloremque voluptatem odio. Voluptas mollitia voluptates quo impedit quaerat aut et qui. Doloribus consequuntur culpa non sit labore possimus.
Eum maiores consequatur voluptatibus ab quo. Impedit accusamus omnis exercitationem aut fugit. Cupiditate laudantium iste ut sed nisi aspernatur vitae et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...