Terminal Value Calculator
Last updated: June 2026 · Free · No sign-up required
Enter values above and click Calculate to see your result instantly.
How the Terminal Value Calculator works
Every result on this page comes from a real formula — TV = FCF × (1 + g) ÷ (r − g), requires r > g — computed live in your browser the moment you press the button.
For context, the sections beneath the calculator include typical values, a worked example you can recompute by hand, and an FAQ covering the practical details of terminal value calculator.
Quick reference
| FCF $1M, r = 9% | g | Terminal value |
|---|---|---|
| 1% | $12.63M | |
| 2% | $14.57M | |
| 2.5% | $15.77M | |
| 3% | $17.17M |
functions Shows the working, not just the answer
For students and teachers, the final number is only half the value. Every math tool here exposes the formula it applied, the intermediate steps, and the rounding rule, so you can follow along, check your homework, or use the answer in a proof or report with confidence.
calculate Accurate to the spec
Calculations use 64-bit floating point with sensible rounding for the domain (currency to 2 decimals, percentages to 4 decimals, algebra to 6 significant figures). Where exact rational arithmetic matters — fractions, factorials, simplification — we use a dedicated BigNumber path so 1/3 + 1/6 returns ½, not 0.49999.
school Free for classroom use
Educators are welcome to link to any math calculator on CalcaTools from a class site, Google Classroom, or worksheet. The pages are mobile-friendly, free, ad-supported (so we can keep them free) and have no sign-up wall — students just click and use them in class or at home.
tips_and_updates Pair with the spoke articles
Below the calculator we link a small set of plain-English explainer pages — "What is a percentage?", "Why does PEMDAS matter?", and so on. They cover the underlying concept in 4–6 short paragraphs. Read those before the calculator if the topic is new, or after if you want the extra context.
Interpretation guide
| Check | Guideline |
|---|---|
| g vs GDP | Keep g ≤ long-run nominal GDP growth (~2–3%) |
| r − g spread | Small spreads inflate TV — sanity-check under 4% |
| TV share of DCF | Often 60–80% of total value — sensitivity-test g and r |
Formula & methodology
Formula: TV = FCF × (1 + g) ÷ (r − g), requires r > g
- Enter the final forecast-year free cash flow.
- Enter the perpetual growth rate g (conservative: at or below GDP growth).
- Enter the discount rate r (usually WACC); the tool computes FCF×(1+g)÷(r−g).
- Remember to discount this TV back to present value before adding it to your DCF.
Example: $1M FCF growing 2.5% forever at a 9% WACC → TV = $1.025M ÷ 6.5% = $15.77M at the horizon.