Terminal Value

Centrais Elétricas Brasileiras S.A.... (EBR-B)


+0.09 (+1.12%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.37
Free cash flow (t + 1) 8,059.36
Terminal Value 150,081.24
Present Value of Terminal Value 105,174.79

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