Terminal Value

China Education Resources Inc. (CHN.V)


0.00 (0.00%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 2.81
Free cash flow (t + 1) 0.22
Terminal Value 27.01
Present Value of Terminal Value 23.51

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