Terminal Value

Eagle Bancorp Montana, Inc. (EBMT)

$19.5

+0.15 (+0.78%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.02
Free cash flow (t + 1) 39.34
Terminal Value 978.50
Present Value of Terminal Value 730.50



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