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Growth Value & Terminal Value

Hi, can you please inform the formula used for the Growth Value and Terminal Value under the section of Company Value in Stock Fair Value Calculator



  • Sure! Here's the formula used for determining the Intrinsic value (IV) in the FAIR VALUE CALCULATOR!

    IV of a company = growth value + terminal value

    Growth Value = EPS * X * (1 - Xⁿ) / (1 - X)
    Terminal Value= EPS * Xⁿ * Y * (1 - Yⁱ) / (1 - Y)
    Where, X = (1 + g) / (1 + r)
    And Y = (1 + t) / (1 + r)

    EPS = Earnings Per Share
    g = growth rate
    n = No of years with the estimated growth rate (g)
    t = terminal growth rate
    i = No of years in the terminal value (t)
    r = discount rate

    I hope this is useful. Cheers!

  • Thank you Mr.Kritesh. Regards

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