The estimate of a firm's value at the end of the forecast horizon using a valuation multiple is also called its:
A)fixed value.
B)payback value.
C)terminal value.
D)future value.
E)intrinsic value.

Question

Quizplus · Accepted Answer

The estimate of a firm's value at the end of the forecast horizon using a valuation multiple is called its terminal value. Terminal value is an important concept in financial analysis as it represents a significant portion of the firm's total value. It is typically calculated using a multiple of earnings or cash flow and applied to projected future cash flows beyond the forecast horizon. The other options, such as fixed value, payback value, future value, and intrinsic value, do not accurately describe the concept of terminal value.

The Estimate of a Firm's Value at the End of the Forecast