Terminal Value

Imperial Oil Limited (IMO.TO)

$72.69

+0.63 (+0.87%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 11.57
Free cash flow (t + 1) 3,453.79
Terminal Value 36,089.75
Present Value of Terminal Value 20,875.97



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