Terminal Value

Bath & Body Works, Inc. (LB)


-0.15 (-0.19%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.49
Free cash flow (t + 1) 1,187.64
Terminal Value 15,856.38
Present Value of Terminal Value 10,077.01

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