Terminal Value
Abercrombie & Fitch Co. (ANF)
$25.2
+0.58 (+2.36%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 5.42 |
| Free cash flow (t + 1) | 135.94 |
| Terminal Value | 3,974.74 |
| Present Value of Terminal Value | 3,052.77 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Abercrombie & Fitch Co.’s cash flows after that period (if we don’t include this, we would have to assume that Abercrombie & Fitch Co. stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.