There is no right answer. How do you check if you are on the right track? Why is this important? The terminal value as a percentage of firm value could be anywhere from 50-80% usually. The terminal value as a percentage of firm value could be lower or higher under specific conditions too. Look at the terminal value as a percentage of firm value to make sure your DCF is not too dependent on future projections of terminal cash flow. How else can you check if your terminal assumptions are reasonable?
You can check if your terminal assumptions are reasonable by testing your terminal value against other indicators.
You can check your terminal valuation against a valuation using a FCF/EBIT multiple. The multiple could be based on the company’s current valuation or industry multiple. You can also check your terminal valuation against an earnings multiple such as PE multiple.