Terminal Value

II-VI Incorporated (IIVI)

$41.95

+0.30 (+0.72%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.17
Free cash flow (t + 1) -92.17
Terminal Value -1,493.81
Present Value of Terminal Value -1,008.70



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