Terminal Value

Bassett Furniture Industries, Incor... (BSET)


-0.05 (-0.36%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.96
Free cash flow (t + 1) 17.14
Terminal Value 432.80
Present Value of Terminal Value 324.02

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