Terminal Value

Lucara Diamond Corp. (LUC.TO)


0.00 (0.00%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.64
Free cash flow (t + 1) 21.17
Terminal Value 318.77
Present Value of Terminal Value 210.63

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