Free cash flows present value calculation : 3-period model

Around the formula...

Over three periods lasting n1 years, n2 years, and up to infinity (for example : years 0 to 5, years 6 to 10, years 11 to infinity...), cash flow rises by g1 for n1-1 years, then by g2 for n2 years and then by g3 to infinity. Present value is then equal to:

This formula is useful when the growth rate is very high at the beginning of the period of projection, i.e. higher than the discounting rate, and then gradually declines.

Practically :