Life & Banc Split Corp. (LBS.TO)
|Growth in perpetuity method:|
|Long-term growth rate|
|Free cash flow (t + 1)||-103,085.58|
|Present Value of Terminal Value||-|
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Life & Banc Split Corp.’s cash flows after that period (if we don’t include this, we would have to assume that Life & Banc Split Corp. stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.