Short definition: The terminal value (TV) is the estimated value of a company, investment, or project beyond a specific forecast period.
Explanation: The terminal value is often used in business valuation (e.g., discounted cash flow analysis) to estimate the value of future cash flows that are expected after the forecast period. It represents a significant portion of the total value.
Example: In the valuation of a startup, the terminal value is used to estimate the value of the company after an initial growth phase, when a more stable growth is expected.