Terminal Value
Franklin Financial Services Corpora... (FRAF)
$31.34
+0.15 (+0.48%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 8.59 |
| Free cash flow (t + 1) | 17.13 |
| Terminal Value | 259.88 |
| Present Value of Terminal Value | 172.12 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Franklin Financial Services Corporation’s cash flows after that period (if we don’t include this, we would have to assume that Franklin Financial Services Corporation stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.