Term
Terminal value
In a DCF, the value of every year after the last one you project in detail, usually assuming the business grows forever at a small constant rate, or sells at a multiple. It tends to be the biggest piece of the total, so a small change in its assumptions moves the result a lot.
In pesos: If from year six on a stand will deliver $10,000 MXN a year growing 3%, and you discount at 13%, those years are worth $10,000 ÷ (13% − 3%) = $100,000 at that point, before bringing them back to today.
Where to go deeper
2/4 6 min Read What you actually buy when you buy a share A share is a piece of a company, not a number on a screen. Where its value comes from, why the price moves, what a dividend is, and why it is not a lottery ticket.More terms on the same topic
Educational content only: not financial, investment or tax advice. The numbers are examples to understand the idea, not a forecast or a recommendation.