Add the discounted cash flows from Step 3 and the terminal value from Step 4 to get the total present value of the investment or business. Importance of Discounted Cash Flow ...

Cash flow is a measurement of the money moving in and out of a business, and it helps to determine financial health.

After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage.

Free cash flow yield measures a company's cash generation relative to its market value, helping investors assess financial health and potential.

We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future ...