Terminal Value

H&R Real Estate Investment Trust (HR-UN.TO)


-0.11 (-0.88%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.82
Free cash flow (t + 1) 358.81
Terminal Value 5,261.22
Present Value of Terminal Value 3,447.80

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