Terminal Value

Alibaba Group Holding Limited (BABA)


+0.88 (+1.12%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.93
Free cash flow (t + 1) 940,496.22
Terminal Value 13,571,373.96
Present Value of Terminal Value 8,848,839.12

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