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The missing fifth discount

Valuation review · Fictional case

The situation

A fictional business forecasts five explicit years. Their combined present value is $32m. Next-year FCFF at the terminal date is $10m, WACC is 10%, and perpetual growth is zero. A draft values the operations at $132m.

The decision

What is the corrected operating value, before any net-debt adjustment?

Study stress-test terminal value