Hello monkeys,
Revising an old model I am finding this way to calculate the Terminal Value in a FCFE DCF.
Exit FCF from DCF (I placed the previous unlevered FCF year to the Terminal one) Terminal Value From DCF (I placed my Unlevered FCFF Terminal Value) Exit Debt (Netted) (I placed the Net Debt/cash at the last projected year) TV Discount Rate (I subtracted debt from my terminal value and discounted it at the Ke)
I get to my Discounted TV corresponding to my equity Value.
My question is, should I have just used the Exit FCFE rather than the Exit FCFF? Should I have discounted my TV using as r the Ke?
I indeed did assume Exit was last projected year.
Hope you can shed some light Best!
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