Terminal Value
II-VI Incorporated (IIVI)
$41.95
+0.30 (+0.72%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 8.08 |
| Free cash flow (t + 1) | -92.17 |
| Terminal Value | -1,515.92 |
| Present Value of Terminal Value | -1,027.90 |
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.