Terminal Value

Art's-Way Manufacturing Co., Inc. (ARTW)


-0.02 (-1.08%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.36
Free cash flow (t + 1) -2.62
Terminal Value -111.15
Present Value of Terminal Value -89.79

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