Why would you use Gordon Growth rather than Multiples Method to calculate Terminal Value?

In banking, you would almost always use the Multiples Method. The reason is it’s easier to get clear exit multiples, whereas variance in WACC and TGR can cause the Terminal Value to swing a lot while using Gordon Growth. Gordon Growth is still worth knowing cold, since it is a highly common technical.

But, you would use Gordon Growth if you have no good Comparable Companies or if there is a reason to believe that future growth would be super volatile. In practice, different banks have different standards but giving the above answer about how you almost always use the Multiples Method is the safest answer.