DCF & WACC
Derive the implied perpetuity growth rate from a terminal value. Show the algebra.
Model answer
Start from the Gordon formula: TV = FCF_N x (1 + g) / (WACC - g). Multiply out: TV x (WACC - g) = FCF_N x (1 + g). Expand: TV x WACC - TV x g = FCF_N + FCF_N x g. Group the g terms: TV x WACC - FCF_N…
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