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When comparing the sensitivity of Terminal Value to a 0.5% change in WACC versus a 0.5% change in the perpetuity growth rate (g), which is typically true?

1. Terminal Value is more sensitive to a 0.5% change in g than to a 0.5% change in WACC.
2. Sensitivity is identical because only the spread (WACC - g) matters for valuation.
3. Terminal Value is more sensitive to a 0.5% change in WACC because it impacts both the Terminal Value and the individual discount factors for years 1-5.
4. Sensitivity to g is higher because it represents the growth of cash flows into infinity.

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