Terminal Value

Domino's Pizza, Inc. (DPZ)


+4.52 (+1.37%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.55
Free cash flow (t + 1) 1,336.05
Terminal Value 37,635.25
Present Value of Terminal Value 28,727.88

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