Terminal Value

Bristol-Myers Squibb Company (BMY)


+0.86 (+1.28%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.00
Free cash flow (t + 1) 27,774.08
Terminal Value 925,802.65
Present Value of Terminal Value 725,390.60

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.