Terminal Value may be computed as either a multiple of the last forecast EBITDAn or using the Perpetual Growth Method which builds on the last Free Cash Flow (FCFn) forecast. Terminal Value (TV) = EBITDAn x EBITDA Multiplier Terminal Value (TV) = (FCFn x (1 +g)) / (r -g) where g is the growth rate in perpetuity and r is the Weighted Average Cost of Capital (WACC). Lola, Inc. has forecast EBITDAn of $16M and forecast FCFn of $14M. WACC is 9.5%, the expected growth rate is 4.5% and the EBITDA Multiplier is 6.7.

1. Compute the Terminal Value using the EBITDA Multiplier Method.

2. Compute the Terminal Value using the Perpetual Growth Method.