When trying to Calculate the intrinsic value of Amersheen why is the Terminal Value equal to 0 when the share price is equal to the book value per share? I know someone is going to give me the reason and I’m going to realize I’m an idiot but I’m ready for it.
LOL.
The terminal term is zero because the TV term is = [P(t) - B(t)] / (1 + r)^t. Refer to formula 7 in the reading (don’t have the book with me, so don’t know the page number).