The terminal value as a percentage of firm value could be anywhere from 50-80%. Under specific conditions, your terminal value can also be higher than 80% of the firm value. And the terminal value is significantly impacted by the terminal growth rate. Even a little change in the terminal growth rate will result in millions of dollar difference in terminal value. Therefore it is important to get this right.

On this page, we address the question: Should you use the real rates of growth vs. nominal rate of growth when estimating terminal growth rates when using the perpetual growth rate method?

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