Terminal Value

Laboratory Corporation of America H... (LH)

$259.13

-1.02 (-0.39%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.68
Free cash flow (t + 1) 3,535.61
Terminal Value 75,547.15
Present Value of Terminal Value 54,676.80



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