anonymous
  • anonymous
company being valued is in industry undergoing change; in 5 - 10 years business model in industry will be totally different, company unlikely to adapt. correct to: a) value flows for next 5 years with no growth, + b) value flows for following 5 years with annual growth (-10%), c) assign no terminal value? thanks
Finance
schrodinger
  • schrodinger
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anonymous
  • anonymous
If you feel the company will not adapt, you should estimate cash flows from years 6-10 and then either assume that the firm liquidates or assume that the firm will shrink over time (a negative terminal growth rate)
anonymous
  • anonymous
thanks

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