Typically, you project 5-10 years because it’s expected that the company will be a mature company after the projection period. Also, it’s often very difficult to project beyond that. Once the company is mature, we can apply a terminal value.
How do you choose a projection period in the DCF?
Typically, you project 5-10 years because it’s expected that the company will be a mature company after the projection period. Also, it’s often very difficult to project beyond that. Once the company is mature, we can apply a terminal value.