What percentage the terminal value contributes

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Reference no: EM131790472

Terminal Value plays an important role in enterprise valuation. What factors affect the estimate of Terminal Value? How sensitive enterprise valuation is to Terminal value?

After choosing a set of input parameters yourself or using the numbers givn below, please answer the following questions

1. what percentage the terminal value contributes to the total enterprise value?

2. How sensitive is your valuation to inputs?
Suggested inputs:
Gross Margin 40%
Fixed Costs $2,000
Revenue Growth Rate for Years 1 to 5 10%
FCF Steady Growth 3%
Discount Rate 12%
Year 1 Revenue $5,000
Tax Rate 35%
Terminal Year 5

Reference no: EM131790472

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