Terminal Value

First Trust/Abrdn Global Opportunit... (FAM)

$5.38

-0.13 (-2.36%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.47
Free cash flow (t + 1) -0.50
Terminal Value -20.05
Present Value of Terminal Value -16.11



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