Terminal Value

Construcciones y Auxiliar de Ferroc... (CAF.MC)

27.3 €

+0.15 (+0.55%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.92
Free cash flow (t + 1) 409.80
Terminal Value 10,454.16
Present Value of Terminal Value 7,841.50

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