In most discounted-cash-flow valuations, well over half the value sits in the terminal value — the period beyond the explicit forecast. So it is striking how often it is the least-examined number on the page, especially in UAE family-office holdings.
The growth assumption that quietly inflates value
A perpetual growth rate that exceeds long-run nominal GDP is a value machine that runs forever — and it is the single most common drift we re-test. Terminal growth should be modest, defensible, and consistent with the economics of the business at maturity, not an extrapolation of a good forecast year.
Make reinvestment consistent with growth
Growth is not free. If the terminal value assumes continued growth, it must also assume the reinvestment (capex and working capital) needed to fund it — otherwise the model creates cash from nothing. We check the implied return on capital in perpetuity, and prefer cross-checking the terminal value against an exit-multiple sanity test before relying on it.
General valuation guidance; terminal-value assumptions must be set per asset and reviewed at each valuation date.