Terminal Value

Dillard's, Inc. (DDS)

$402.33

-4.42 (-1.09%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.42
Free cash flow (t + 1) 467
Terminal Value 8,616.28
Present Value of Terminal Value 6,024.13



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