Perpetual Growth is a measure used to determine the terminal value of a business or an asset based on the assumption of a constant stream of cash flows into the future. Valuation analysts assume that the firm’s free cash flow will continue to grow at the terminal growth rate, rather than projecting the free cash flow for every period in the future. The perpetual growth method of calculating cash flow beyond the forecast period is the preferred method among academics because of the mathematical theory behind it which assumes that a going concern business will continue to generate cash flow at a stabilised rate into perpetuity.