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.
Updated 2026-09-03
The horizon is how many years are projected explicitly before the terminal value takes over. Angie uses five by default, and ten for a company classified as genuine hypergrowth.
It is the input people expect to matter most and it usually matters least. Growth and discounting work against each other, so extending the horizon mostly moves value out of the terminal calculation and into the explicit one without changing the total by much.
Measured directly by re-running the engine. At a 3 percent growth rate against a 10.6 percent discount rate, the extra ten years are nearly worthless in today's money.
The horizon only becomes consequential when growth genuinely exceeds the discount rate for a sustained period, which is exactly the hypergrowth case. Valuing a company compounding at 30 percent over just five years amputates it, which is why that classification earns a longer explicit phase.
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.
