Terminal Value

Franco-Nevada Corporation (FNV.TO)


-3.05 (-1.52%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.59
Free cash flow (t + 1) 90.98
Terminal Value 1,982.09
Present Value of Terminal Value 1,440.60

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