The worth of a firm, project, or asset after the period for which future cash flows can be predicted is known as its terminal value (TV).
After the projected period, terminal value assumes a company will continue to expand at a specific pace indefinitely. A significant portion of the total assessed value is frequently made up of terminal value.
The formula for calculating the Terminal value is:
[FCF * (1+g)]/(d-g)
Where
FCF = free cash flow for the last forecast period
g = terminal growth rate
d = discount rate
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