Terminal Value
Bristol-Myers Squibb Company (BMY)
$68.545
+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.