I am little confused onValuation. I did a valuation of a cash inflow for 2 years and terminal value cash flow at the end of 2nd year. I arrived at "x" value. Now by just increasing forecast period from 2 years to 5 years (assuming growth at equal to Cost of capital) and keeping all other assumption constant, I get higher value.
Now, I think this is against basic principal. By just increasing the forecast period how can we increase value of organisation.
The increase in value is equal to PV of cash flow of additional 3 years.
Not vary sure, is this correct way to value.