Terminal Value



+0.70 (+2.15%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.53
Free cash flow (t + 1) 9,062.33
Terminal Value 163,875.84
Present Value of Terminal Value 113,989.99

Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of ABB Ltd’s cash flows after that period (if we don’t include this, we would have to assume that ABB Ltd stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.