The calculation of the terminal value basically adds a specified annual net cash growth rate to the year 5 net annual cash flow and divides this value by the difference between the WACC and the specified annual cash growth rate. The cash flow growth rate which is used in the calculation can be specified in cell B51 on the Assumptions sheet and you can also enter a nil value in this cell to assume a zero growth rate as a more conservative valuation basis.

CopyFinancial > The calculation of the terminal value basically adds a specified annual net cash growth rate to the year 5 net annual cash flow and divides this value by the difference between the WACC and the specified annual cash growth rate. The cash flow growth rate which is used in the calculation can be specified in cell B51 on the Assumptions sheet and you can also enter a nil value in this cell to assume a zero growth rate as a more conservative valuation basis.