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Terminal value (finance) In finance, the terminal value (also known as “ continuing value ” or “ horizon value ” or " TV ") [ 1] of a security is the present value at a future point in time of all future cash flows when we expect stable growth rate forever. [ 2] It is most often used in multi-stage discounted cash flow analysis, and ...
Discounted cash flow. The discounted cash flow ( DCF) analysis, in financial analysis, is a method used to value a security, project, company, or asset, that incorporates the time value of money. Discounted cash flow analysis is widely used in investment finance, real estate development, corporate financial management, and patent valuation.
The terminal value is hence: (182*1.06 / (0.15–0.06)) × 0.229 = 491. (Given that this is far bigger than the value for the first 5 years, it is suggested that the initial forecast period of 5 years is not long enough, and more time will be required for the company to reach maturity; although see discussion in article.)
The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is UK£65.80b.
Terminal velocity. The downward force of gravity ( Fg) equals the restraining force of drag ( Fd) plus the buoyancy. The net force on the object is zero, and the result is that the velocity of the object remains constant. Terminal velocity is the maximum speed attainable by an object as it falls through a fluid ( air is the most common example).
Stokes' law. In fluid dynamics, Stokes' law is an empirical law for the frictional force – also called drag force – exerted on spherical objects with very small Reynolds numbers in a viscous fluid. [1] It was derived by George Gabriel Stokes in 1851 by solving the Stokes flow limit for small Reynolds numbers of the Navier–Stokes equations.
Equations for a falling body. A set of equations describing the trajectories of objects subject to a constant gravitational force under normal Earth -bound conditions. Assuming constant acceleration g due to Earth’s gravity, Newton's law of universal gravitation simplifies to F = mg, where F is the force exerted on a mass m by the Earth’s ...
APV formula; APV = Unlevered NPV of Free Cash Flows and assumed Terminal Value + NPV of Interest Tax Shield and assumed Terminal Value: The discount rate used in the first part is the return on assets or return on equity if unlevered; The discount rate used in the second part is the cost of debt financing by period.