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Session 9: Terminal Value

Aswath Damodaran

A lesson from Aswath Damodaran (NYU Stern), part of the Primer topic DCF Valuation.

1 idea from this video

  • TechniqueValuation located

    Terminal value is usually most of the answer, and most of the risk

    Check what share of the value is terminal and what multiple the terminal assumptions imply; those two checks catch most broken DCFs.

    Any DCF review, any interview follow-up on the terminal growth rate, and any model where the answer seems too sensitive to the last year.