Terminal Value

Barings BDC, Inc. (BBDC)


+0.23 (+2.79%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 3.41
Free cash flow (t + 1) 3,619.45
Terminal Value 256,698.61
Present Value of Terminal Value 217,075.51

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