Terminal Value

Flagstar Bancorp, Inc. (FBC)


+0.05 (+0.15%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.53
Free cash flow (t + 1) 1,489.13
Terminal Value 58,859.04
Present Value of Terminal Value 47,163.76

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