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In particular, the Terminal Growth Rate is used in a DCF analysis to help calculate the TerminalValue. The Terminal Growth Rate and the TerminalValue are important figures in valuations, because they usually represent a significant contributor to the final valuation estimate.
But here, we use what interest we could get from an alternative investment in the market, called the Market Rate. Discount Factor (using Market Rate: r=10%). But first, a quick aside, which you can feel free to skip if you want to jump ahead: Why Do We Use the Market Rate to Calculate the Discount Factor? You get: Year.
Different methods are used, like looking at market prices, predicting future profits, and evaluating assets. Some techniques include comparing companies in the market, estimating future cash flows, and assessing the value of tangible assets. to its marketvalue.
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