Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
What is the horizon value? Why is it also called the terminal value
or continuing value?
Expert Solution

Horizon Value:
Horizon value is the value of the expected dividend that will be received after the horizon date.
Terminal Value:
Terminal value refers to the value of the firm that grows at a constant rate for an indefinite period.
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