Terminal Value

Empire State Realty Trust, Inc. (ESRT)


+0.38 (+5.79%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.80
Free cash flow (t + 1) 26.22
Terminal Value 689.91
Present Value of Terminal Value 520.43

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