Terminal Value

Mid-America Apartment Communities, ... (MAA)

$187.79

+3.54 (+1.92%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.71
Free cash flow (t + 1) 896.24
Terminal Value 24,157.52
Present Value of Terminal Value 18,300.88



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