Module VI· DCF Model BuildIntermediate
Question

How do you build terminal value with Gordon Growth and exit multiple in parallel?

Answer

Gordon Growth terminal value equals final-year FCF x (1 + g) / (WACC - g). Exit multiple terminal value equals final-year EBITDA or EBIT times exit multiple. Build both side by side, discount each to present value, and compare implied multiples from Gordon Growth against market multiples for sanity.