Terminal Value
Kratos Defense & Security Solutions... (KTOS)
$11.25
+0.08 (+0.72%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 5.20 |
| Free cash flow (t + 1) | 51.18 |
| Terminal Value | 1,599.52 |
| Present Value of Terminal Value | 1,241.40 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Kratos Defense & Security Solutions, Inc.’s cash flows after that period (if we don’t include this, we would have to assume that Kratos Defense & Security Solutions, Inc. stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.