Terminal Value

BlackRock Multi-Sector Income Trust (BIT)


-0.05 (-0.35%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 2.90
Free cash flow (t + 1) 192,010.62
Terminal Value 21,334,513.38
Present Value of Terminal Value 18,492,936.04

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