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      "text": "For example, if you forecast 5 years of UFCF, the Terminal Value is what the business is worth on the last day of Year 5.",
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      "text": "215. What's the formula for the Terminal Multiple Method? We take the final year's forecasted EBITDA and multiply it by what we think it'll be worth on an LTM EV/EBITDA basis. Terminal Value = Final Year EBITDA x LTM EV/EBITDA Multiple",
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      "text": "216. Why do you use LTM in this case instead of a forward multiple? We use LTM multiple here because we're applying a multiple against our final year's forecasted EBITDA. We don't have the EBITDA beyond our final year. Therefore, mechanically we have to use LTM EBITDA.",
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      "text": "214. What's the formula for the Perpetuity Growth Method? First, we multiply the final year's Unlevered Free Cash Flow by the Perpetuity Growth Rate. Then we divide that by the difference between WACC and Perpetuity Growth Rate. Terminal Value = (Final Year UFCF x (1 + PGR)) / (WACC - PGR) PGR = Perpetuity Growth Rate",
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      "text": "213. Walk me through the different ways you can calculate Terminal Value. We can calculate Terminal Value in two ways. First, we can calculate Terminal Value using the Perpetuity Growth Method. This method assumes that the company keeps operating and generates cash flow forever into the future. Second, we can calculate Terminal Value using the Terminal Multiple Method. This method assumes we sell the company to an acquirer at the end of our forecast period.",
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      "text": "We can calculate Terminal Value in two ways. First, we can calculate Terminal Value using the Perpetuity Growth Method. This method assumes that the company keeps operating and generates cash flow forever into the future. Second, we can calculate Terminal Value using the Terminal Multiple Method. This method assumes we sell the company to an acquirer at the end of our forecast period. — The Core Technicals Guide",
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      "text": "IV. Discounted Cash Flow (DCF) C. Terminal Value",
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