Terminal Value
Bath & Body Works, Inc. (LB)
$79.92
-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.