Terminal Value Example High Growth Period First Year of Stable Growth Period Valuation Date 0 Year 1 2 3 4 5 6 Growth Rate Tax Rate Return on Invested Capital (ROIC) Reinvestement Rate (K) Weighted Average Cost of Capital (WACC) EBIT 3% 40% 12% 40% 20% 60% 14% 40% 20% 60% 40% 20% 60% 14% 40% 20% 60% 14% 40% 20% 60% 14% 14% 10% $1,000 Terminal Value Example High Growth Period First Year of Stable Growth Period Valuation Date 0 Year 1 2 3 4 5 6 Growth Rate Tax Rate Return on Invested Capital (ROIC) Reinvestement Rate (K) Weighted Average Cost of Capital (WACC) EBIT 3% 40% 12% 40% 20% 60% 14% 40% 20% 60% 40% 20% 60% 14% 40% 20% 60% 14% 40% 20% 60% 14% 14% 10% $1,000