Terminal Value
Bristol-Myers Squibb Company (BMY)
$63.82
-0.74 (-1.15%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 5.14 |
| Free cash flow (t + 1) | 27,774.08 |
| Terminal Value | 884,524.82 |
| Present Value of Terminal Value | 688,446.45 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Bristol-Myers Squibb Company’s cash flows after that period (if we don’t include this, we would have to assume that Bristol-Myers Squibb Company stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.