Words / T / Business

terminal value

noun

C1CEFR level
75/100Rarity: rare
TechnicalRegister

The estimated value of a business beyond the explicit forecast period in a discounted cash flow model, typically calculated using a perpetuity growth or exit-multiple approach.

More than seventy per cent of the valuation sat in the terminal value, which made the model highly sensitive to our growth assumption.

Similar: TV

Topic: Corporate finance in Business English

Rarity runs from 0 (a word everyone knows) to 100 (almost never seen outside specialist or literary writing). Level is the word's real difficulty on the CEFR scale, from A1 to C2.

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