Terminal Value

Computer Modelling Group Ltd. (CMG.TO)

$5.89

+0.36 (+6.51%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.47
Free cash flow (t + 1) 19.94
Terminal Value 266.93
Present Value of Terminal Value 169.79



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