Terminal Value

Cooper-Standard Holdings Inc. (CPS)


-0.24 (-3.52%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.12
Free cash flow (t + 1) 3.29
Terminal Value 64.24
Present Value of Terminal Value 45.54

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