Terminal Value

Methode Electronics, Inc. (MEI)


+0.02 (+0.05%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.75
Free cash flow (t + 1) 136.88
Terminal Value 2,380.49
Present Value of Terminal Value 1,639

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