Hey, guys. I am a pre-MBA student. I studied one corporate finance class in law school so my question may seem too plain and simple. I was reading the DCF and noted that the calculation of the terminal value is different from the formula I learned from class. The formula taught in our class is to divide the year 10 cash flow by the discount rate minus the growth rate but the formula I found on the wso guide is to multiply cash flow by 1 plus the growth rate and divide that by the discount rate minus the growth rate. Could anyone explain why there is a difference? Or I completely misunderstood what the prof had taught us. Thank you!
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