DCF & WACC
Write the Gordon growth terminal value formula and be precise about which year's cash flow goes in the numerator.
Model answer
TV (at end of final forecast year N) = FCF_N x (1 + g) / (WACC - g), where FCF_N is the final explicit-year unlevered free cash flow, g is the perpetual growth rate, and WACC is the discount rate.…
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