Terminal Value

Accuray Incorporated (ARAY)

$2.06

-0.08 (-3.74%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.33
Free cash flow (t + 1) 8.62
Terminal Value 103.50
Present Value of Terminal Value 63.31



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