Terminal Value
La-Z-Boy Incorporated (LZB)
$29.77
+0.54 (+1.85%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 6.85 |
| Free cash flow (t + 1) | 205.07 |
| Terminal Value | 4,228.30 |
| Present Value of Terminal Value | 3,035.94 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of La-Z-Boy Incorporated’s cash flows after that period (if we don’t include this, we would have to assume that La-Z-Boy Incorporated stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.