Module II· DCF — Terminal ValueIntermediate

Question

How do you calculate the 'implied exit multiple' from a Gordon Growth terminal value?

Answer

Mechanics

the implied exit multiple is the EBITDA multiple that a Gordon Growth terminal value implicitly assumes:

```
Implied Exit Multiple = Gordon TV / Terminal Year EBITDA
```

Deep diveShow more details

Example

Inputs:

Gordon TV: $940m
Terminal Year EBITDA: $100m

Calculation:
```
Implied Exit Multiple = $940 / $100 = 9.4x
```

Cross-check against trading comps

Implied 12x against a comps mean of 7x: Gordon is aggressive — g too high or WACC too low.
Implied 5x against a comps mean of 7x: Gordon is conservative. A possible value-creation reason, or the terminal capex normalization is too high.

Pitch tip

the implied multiple is the most important sanity-check number in a DCF pitch — alongside the TV share of EV.

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