Also called projection period
Horizon
How many years are projected explicitly before the terminal value takes over. Longer horizons matter only when growth genuinely exceeds the perpetual rate.
A fuller explanation of this one is still being written. The definition above is the short answer.
See also
- Terminal value — Everything the business is worth beyond the projection horizon, set by Gordon growth or an exit multiple and then discounted back. It is usually the majority of the answer.
- Growth rate — Year-one growth, faded toward the perpetual rate across the horizon. Left blank it comes from the company's own history, capped at the sector ceiling, and a genuine decline is kept rather than floored up.
- Sum of PV — Every discounted free cash flow across the explicit projection horizon, added up. Everything after the horizon is handled by the terminal value instead.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
