Three terminal-value worked examples
Each example walks through both methods with fully-disclosed inputs and the cross-check between Gordon Growth and Exit Multiple terminal values.
Acme SaaS Co. SaaS
Divergence +27%$200M ARR, 18% growth, 22% FCF margin in steady state. High-growth profile transitioning to mature.
Gordon Growth math: 88 * 1.03 / 0.075 = $1,209M. Exit multiple is above Gordon Growth, common for software comps trading on growth optionality. Back-solved implied g from the 14x multiple is roughly 4.5% (88 * (1+g) / (0.105 - g) = 1,540 solves to g = 4.5%), which sits above the long-run nominal GDP ceiling typically used for terminal growth and should be stress-tested.
Hilltop Industrial Inc. Industrial
Divergence -2%$1.2B revenue, 4% growth, 14% EBITDA margin. Mature mid-cap industrial with cyclical exposure.
Gordon Growth math: 95 * 1.022 / 0.063 = $1,541M. Methods converge tightly, typical for mature industrials where comp-set multiples sit close to the perpetuity implied multiple. Report the midpoint, note both inputs.
Quiet Power Utility Corp. Regulated utility
Divergence +143%$3.5B revenue, 1.5% growth, 28% EBITDA margin. Regulated returns, low-volatility cash flows.
Wide divergence flags an issue. The 11x multiple looks reasonable for utilities but implies a perpetuity g well above 1.5%. Either the comp set is in a higher-growth regulatory regime or 1.5% g understates allowed rate-base growth. Reconcile before publishing.
Build your own example in the calculator
The calculator accepts your own FCF, EBITDA, WACC, and multiple. Outputs both terminal values, the present-value discount, and the implied perpetuity growth from the exit multiple.
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