Hello,
I wanted to ask behind the rationale of dividing terminal value by WACC in formula: Residual year FCFF/(WACC-Long_term_growth)
. I understand that long term growth counteracts WACC however I do not completely understand the figure that we receive from this division. Is it like 10% WACC equals 10x exit multiple? If yes, then why?
| +196 | Why UBS Is the Worst Place to Start Your IB Career | 32 | 9h |
| +159 | ONLY THESE BANKS OR YOU STRUCK OUT | 39 | 16h |
| +65 | Firm Thinks I'm Lying About Offer | 20 | 15h |
| +58 | Indiana University Fraternity Pipelines | 35 | 7h |
| +40 | Rogo AI | 20 | 3h |
| +39 | Stay at Weak Dealflow Team or Lateral? | 12 | 1d |
| +38 | Elite Boutique interview questions | 10 | 4h |
| +36 | Suspended for a Year | 19 | 26m |
| +23 | 1st Half 2026 (1H26) RX IB & RX Co. Rankings | 16 | 2h |
| +22 | Is there anything worse than having no work? | 8 | 2d |
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.
Iure minima omnis labore nihil. Velit fuga quis assumenda commodi. Sapiente iusto vel esse quod omnis sed. Qui perspiciatis iste rerum aut et consequatur numquam.
Vero cum quas ut ea non. Ullam natus qui et provident nulla. Et mollitia similique sequi a dolores sed. Omnis est facilis libero. Nemo vel cupiditate ipsa rerum qui tempora.
Voluptatem vel veniam occaecati sequi voluptatem porro qui. Et et voluptatum quos. Dignissimos dignissimos ipsa qui aut architecto consequatur eligendi. Qui necessitatibus cupiditate ducimus consectetur consequatur libero.
Laborum sit at sint adipisci et nihil. Error earum ut quae.
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...