Terminal Value

PGIM High Yield Bond Fund, Inc. (ISD)


-0.14 (-1.05%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.02
Free cash flow (t + 1) 17,198,736.06
Terminal Value 851,422,577.26
Present Value of Terminal Value 699,134,791.96

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