Valuation Calculations 101 Worked Exampels
of each year's cash flow using the formula: \[ PV = \frac{FCF}{(1 + r)^t} \] where \( r = 10\% \), and \( t \) is the year number. Step 2: Compute the Terminal Value (TV) at Year 5 using the Gordon Growth Model: \[ TV = \frac{FCF_{Year 5} \tim