Terminal Value

EDP - Energias do Brasil S.A. (ENBR3.SA)


+0.11 (+0.51%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.12
Free cash flow (t + 1) 4,240.27
Terminal Value 135,906.04
Present Value of Terminal Value 105,879.53

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