Post by The Analyst's Code

𝗟𝗮𝘀𝘁 𝘆𝗲𝗮𝗿, 𝘀𝘂𝗺𝗺𝗲𝗿 𝗶𝗻𝘁𝗲𝗿𝗻𝘀𝗵𝗶𝗽 𝗰𝗮𝗻𝗱𝗶𝗱𝗮𝘁𝗲𝘀 𝗮𝘁 Morgan Stanley, BNP Paribas 𝗮𝗻𝗱 Perella Weinberg 𝗴𝗼𝘁 𝗮𝘀𝗸𝗲𝗱 𝘁𝗵𝗶𝘀 𝗶𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻: "How do you calculate terminal value in a DCF?" Most said: "You take the final year's cash flow and grow it forever." Most didn't get the offer. That answer is half right. It names one method, misses the second, ignores the cap on growth that makes the formula credible, and skips the step that comes after. And since terminal value typically drives 60-80% of the entire DCF, this is the number your whole valuation lives or dies on. That's exactly what interviewers are testing. Swipe to learn what interviewers actually want to hear (written by our investment bankers): the 2 methods and when to use each, why g never beats the economy, the discounting step almost everyone forgets, a full worked example, and the answer that gets you the offer ↓ Which IB interview question should we break down next? Drop it in the comments - the most requested goes next 👇 Save this and follow The Analyst's Code for the concepts every IB internship candidate needs to know, broken down 3x a week. 𝗣𝗿𝗲𝗽𝗮𝗿𝗶𝗻𝗴 𝗳𝗼𝗿 𝗮 𝘀𝘂𝗺𝗺𝗲𝗿 𝗼𝗿 𝗼𝗳𝗳-𝗰𝘆𝗰𝗹𝗲 𝗮𝗽𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻? 𝗝𝗼𝗶𝗻 𝘁𝗵𝗼𝘂𝘀𝗮𝗻𝗱𝘀 𝗼𝗳 𝘀𝘁𝘂𝗱𝗲𝗻𝘁𝘀 𝗰𝘂𝗿𝗿𝗲𝗻𝘁𝗹𝘆 𝘂𝘀𝗶𝗻𝗴 𝗧𝗵𝗲 𝗔𝗻𝗮𝗹𝘆𝘀𝘁'𝘀 𝗖𝗼𝗱𝗲 𝗣𝗿𝗲𝗽 𝗣𝗹𝗮𝘁𝗳𝗼𝗿𝗺 𝘁𝗼 𝗴𝗲𝘁 𝗶𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄-𝗿𝗲𝗮𝗱𝘆. #InvestmentBanking #IBD #FinanceInterview #BreakIntoIB #InternshipPrep #DCF #Valuation #TerminalValue