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Analysts normally must calculate a terminal value of a firm when preparing a discounted cash flow valuation. There are three ways to prepare this estimate,

Analysts normally must calculate a terminal value of a firm when preparing a discounted cash flow valuation.  There are three ways to prepare this estimate, which include (1) assuming a liquidation value of the firm's assets in the terminal year, (2) applying a multiple to earnings, revenues or book value, and (3) assuming the free cash flows will grow at a constant rate forever (a stable growth rate).  Using each of these methods.



What is your estimate of the terminal value for Coca-Cola Company?

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Answer The difference between the discount rate and the terminal growth rate is used to compute terminal value which is derived by dividing the most r... blur-text-image

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