In this session, we first looked at the three key inputs that determine value - revenue growth, operating margins and sales to capital ratios and how best to estimate them. We then looked at the elephant in the DCF room, the terminal value, and laid out broad constraints that keep it in check. In furtherance of that discussion, I would like you take a look at five posts that I had on terminal value on my blog that cover the spectrum of questions related to it:
1. https://aswathdamodaran.blogspot.com/...
2. https://aswathdamodaran.blogspot.com/...
3. https://aswathdamodaran.blogspot.com/...
4. https://aswathdamodaran.blogspot.com/...
5. https://aswathdamodaran.blogspot.com/...
None of these posts is earth shattering, but collectively they can give you a sense of what to keep in mind with the terminal value calculation.
Start of the class test: https://pages.stern.nyu.edu/~adamodar...
Slides: https://pages.stern.nyu.edu/~adamodar...
Post-class test: https://www.stern.nyu.edu/~adamodar/p...
Post-class test solution: https://www.stern.nyu.edu/~adamodar/p...