Terminal Value

Absolute Software Corporation (ABST)

$10.095

-0.06 (-0.54%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.69
Free cash flow (t + 1) 18.54
Terminal Value 395.30
Present Value of Terminal Value 285.96



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