In Discounted dividend valuation , we have to come up with a terminal value of stock which then is discounted back alongwith future dividends to get the Intrinsic value of stock. Is Terminal value synonimous with Continuing value as they are used interchangeably? Does’nt the term Cotinuing value sound more like value in perpetuity whereas Terminal value is the final proceeds from selling the stock at the end of forecast horizon . can anybody respond"
Terminal Value just means the value assigned at the end of the forecasting period. That can be a projected price, selling price, perpetuity value, etc, depending on assumptions and forecasting methodology.
The Gordon Growth Model (of which some variation is usually used to determine Terminal Value) is, in fact, the present value of all future continuing operations. So terminal value is continuing value, it’s just stated as one number (instead of a million smaller numbers that will eventually approach .00000000000001.)