Terminal Value
Franco-Nevada Corporation (FNV.TO)
$198.21
-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.